Industry News
From The Cargo Letter


Air & Ocean Freight Forwarder - Customs Broker News
6 January 1997

Good Monday Morning and Happy New Year of The Ox from our Observation Deck...... overlooking the officially designated "Cargo City" area and....... Runway 25-Right at Los Angeles International Airport.

Welcome new members of the Airforwarders Association !!

China's YEAR OF THE OX will be one of we mark that there are but 6 months left until the transfer of Hong Kong and a mere 79 week ends until the so-called "millennium bug" may disable our computers and data bases unless software patches are used before year 2000. [We suggest you re-review our article "Forwarders & Brokers Need To Beat The Clock" in The Cargo Letter [307] of October 1996] None among us has ever faced the dawn of a new millennium. but the year 2000 is coming.

Who would have imagined that 1997......or any year could begin with M/V Carnival Destiny, the largest passenger ship ever built, setting the world record when it left Miami on 22 Dec. with an amazing 3,269 passengers aboard! It's a GREAT time to be in our transportation industry!

Contribute your knowledge & e-mail to The Cargo Letter.

Michael S. McDaniel, Editor

NOTE: The Cargo Letter is designed & sized to be read using a 12 point Geneva font on a standard 6 inch e-mail field. Please configure your computer.

INDEX to The Cargo Letter:

  1. OUR "A" Section: FF World Trade, Financial & Inland News
  2. Freight Forwarder Trade Briefs
    OUR "B" Section: FF World Air News
  3. Pan Am Back From Airline Graveyard?
  4. FF World Air Briefs
    OUR "C" Section: FF World Ocean News
  5. FF World Ocean Briefs
    OUR "D" Section: FF in Cyberspace
  6. The Cargo Letter "Cyber Ports Of Call"
    OUR "E" Section: The Forwarder/Broker World
  7. Notice Of Domestic Air Loss & Damage Claims


OUR "A" Section: FF World Trade, Financial & Inland News

1. Freight Forwarder Trade Briefs


OUR "B" Section: FF World Air News

2. Pan Am Back From Airline Graveyard?

-- by Michael S. McDaniel, Esq. for The Cargo Letter

LAX - 6 Jan 97 --It was THE U.S. flagship airline and the world's most-revered carrier before going bankrupt in 1991. Now a new Pan American World Airways.......marks its 4th month of service since rebirth in Sept. 1996.

The new Pan Am has just applied to the U.S. DOT for code share authority with Peru's flag carrier and largest airline, AeroPeru for JFK/MIA flights. This code share will be the first Pan Am has established with its growing list of industry partners....... and allows AeroPeru to place itscode (PL) on Pan Am flights between JFK and MIA, thus giving AeroPeru easier access to the New York market.

Other member airlines in the Pan Am marketing partnership include Viasa of Venezuela, Icelandair, Royal Jordanian, Cayman Airways, EgyptAir, Air Ukraine, Taesa of Mexico, Aero Costa Rica, Spain's Air Europa, Asiana of Korea, BWIA International, Faucett of Peru, Finnair, SAETA of Ecuador and Virgin Atlantic Airways. Pan Am says it is projecting to generate nearly 30% of its traffic from Alliance partners.

Now headquartered at Miami, Pan Am is flying Airbus A300s between New York-Los Angeles, New York-Miami, Miami-San Juan, and starting yesterday . .......New York-San Juan nonstop. Additional A300s are said on order. In addition to practically "inventing" U.S. long haul commercial aviation........ the original Pan Am began the first link to Puerto Rico 68 years ago this month is 1929 and was the first with 707 & 747 service to the island. Welcome Back Pan Am (but you've got to get back to Boeing aircraft!) !

3. FF World Air Briefs


OUR "C" Section: FF World Ocean News

4. FF World Ocean Briefs


OUR "D" Section: FF in Cyberspace

5. The Cargo Letter "Cyber Ports Of Call"


OUR "E" Section: The Forwarder/Broker World

6. Notice Of Domestic Air Loss & Damage Claims

-- By Charles Veigel, Esq. with Michael S. McDaniel for The Cargo Letter

Seattle - 3 Jan. -- Our last article, "Written Notice of Loss and Damage Claims in Ocean Transport," (please visit The Cargo Letter on the World Wide Web at Edition [303]) pointed out that only written notice of loss (not actual claim) is required by law under ocean rules of the Carriage of Goods by Sea Act (Title 46 U.S. Code). In domestic air cargo transport, however, there is no legal requirement for written notice of claims for loss & damage. Nevertheless, domestic air cargo carriers generally follow rules which dictate the WRITTEN notice of claim requirements.

U.S. DOMESTIC AIRLINE DEREGULATION: Prior to airline deregulation, the C ivil Aeronautics Board (CAB) reviewed filed tariffs of air cargo carriers. Sh ippers were deemed to have constructive notice of the contents of the tariff, as well as the notice of claim rules for loss & damage. CAB had indicated that most airlines required claims for loss and damage to be filed within 9 months and 9 days from the date of shipment.

The Airline Deregulation Act of 1978 (Pub.L. No. 95-504, 92 Stat. 1705) brought a phased end to the CAB in 1985 as well as the notice of claim rules. Consequently, direct air carriers & indirect air carriers (air forwarders) have been free to mandate rules for loss & damage claims, which often differ from carrier to carrier. Because each carrier may have different rules for air cargo claims, the claimant/transportation practitioner must be familiar with contratural rights of the performing air carrier.

U.S. DOMESTIC AIR CARGO DAMAGE LIMIT: This is usually US$.50 per pound unless the shipper declares the cargo's value and pays a higher shipping rate.

SOURCES OF DOMESTIC AIR CLAIM RULES: To locate the cargo carrier's rule for loss and damage claims, the claimant should look to 3 basic sources: 1.) air waybill of lading; 2.) air service guides; 3.) air cargo tariff (Procedural manual).

The air waybill of lading (AWB) is issued to the shipper; however, the service guides and tariffs (procedural manual) can be requested directly from the direct/indirect carrier. They often contain valuable information not set forth on the air waybill. (Several domestic air carriers have now posted their claim rules on the world wide web.)

These same rules apply for the house air waybill (HAWB) of the indirect air carrier, i.e. the airfreight forwarder/air forwarder. Remember, to the actual air carrier, the indirect air carrier (airfreight forwarder) is the shipper and receives its AWB when cargo is tendered. The actual shipper receives the HAWB of the indirect air carrier/air forwarder. When an HAWB has been issued by the air forwarder, the direct carrier's bill becomes known as an MAWB ......or master air waybill.

FILING DOMESTIC AIR CARGO CLAIMS: This article cannot begin to outline the various rules each domestic air carrier follows for cargo loss & damage claims, but you can certainly benefit by exercising the following guidelines:

1. Written Notice. All notices of claims and supporting documentation mu st be WRITTEN. Any WRITTEN notice of claim should be sent by either certified or registered mail, return receipt requested or via courier to the carrier. Notice given to an air carrier by telefax was upheld in a recent case, see Royal Ins. Co. v. Emery Air Freight Corp., 834 F.Supp. 633,635 (S.D.N.Y. 1993). If by telefax.......keep the confirmation sheet from your machine.

2. Content Of The Written Notice. There are no statutory requirements for written notices of claim. Nevertheless, a claimant's notice should include: (1) name of shipper; (2) name of consignee; (3) AWB or HAWB number; (4) flight number & carrier name; (5) date shipment was delivered to the air carrier; (6) place where the shipment was delivered; (7) port of departure; (8 ) destination port; (9) the description of goods shipped; and (10) a brief decription of the goods lost or damaged as well as value, if known.

3. Content Of Claim. Following written notice of claim to the carrier, a formal written claim with supporting documentation must be provided. Certai nly the notice and the claim can be combined. The domestic air carrier (or indirect air carrier/FF) will require verifiable documentation supporting the claim, such as a survey/inspection, commercial invoices, etc.. [Please visit The Cargo Letter on the World Wide Web at Edition [301] and [303] where we outline documentation necessary to support a cargo claim.]

4. Time Limits. Domestic air carriers require the claimant to provide WRITTEN notice of claim & formal WRITTEN claim within a time period mandated by the AWB/HAWB, etc.. For example, on domestic moves FedEx requires claimants to submit WRITTEN notice of claim within 15 days from delivery in the case of cargo damage, delay or shortage. FedEx also requires claimants submit verifiable documentation supporting a written claim of loss & damage within 90 days after written notice of the claim was received, differing significantly from the old notification period once indicated by CAB before deregulation. Today, if a claimant misses the deadline for filing loss & damage claims in domestic air moves the carrier may move under contractual provisions of its AWB (or HAWB of the indirect air carrier/air forwarder) to deny the claim.

5. Written Notice To The Cargo Underwriter: If the shipment was covered by air cargo insurance, you must notify the cargo insurance underwriter of the claim IMMEDIATELY. If you are to recover under the subject policy of insurance, the underwriter requires that YOU take ALL required steps to preserve claim against the carrier/indirect carrier .......i n order to protect its rights of subrogation.

Following deregulation many shippers became disgruntled, arguing that shorter time limits were overly burdensome and one-sided. Since Deregulation, shippers have had to argue in court that rules for cargo loss & damage were either unconscionable or contrary to public policy under federal common law. These efforts are largely in vain. Still, do not forget that the domestic air carrier's rules are not statutorily prescribed and therefore subject to negotiation. Large volume shippers often negotiate with domestic air carrier's to obtain more favorable claim notice periods and other cons cessions. THE SAFEST COURSE: Purchase quality air cargo insurance from your air forwarder professional and avoid uncertainty

Next time .........we go "Back To The Basics" with international air cargo claims under The Warsaw Convention. [Charles Veigel practices transportation law at the Law Offices of Charles H. Veigel, P.S. in Seattle, Washington]


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