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1. Overview of Claims Procedure For Air Freight

2. Sources of U.S. Domestic Air Cargo Rules

3. Filing An Air Cargo Claim

3. Liability Limits - Int'l & U.S. domestic

4. Written Notice of Claim Requirements

5. Montreal Protocol 4

A DEATAILED PRESENTATION OF MONTREAL PROTOCOL 4 - the current air cargo rules you need to understand

Breif Overview of MP4

Currency Values In Terms of "Special Drawing Rights."

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Montreal Protocol 4 -full text

Montreal Protocol General Overview

Presentation of MP4 By Michael S. McDaniel, Esq. to Air Cargo Americas Congress at Miami

Presentation of The Montreal Convention by Michael S. McDaniel, Esq. to FIATA World Congress at Rotterdam

White House Approval & Review of The Montreal Convention

Schedule of Countries Which have Adopted Various Warsaw Protocols - from IATA

Schedule of Countries Which Have Adopted MP4 - as of June 1999

History of Internation Air Treaties

The Warsaw Convention of 1929 - full text

Currency Values In Terms of "Special Drawing Rights."

Air Cargo Claims - overview, limits & general handling

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C & McD Quick Reference:

U.S. Domestic Air Carriage

Governed by air waybill and U.S. Federal Common Law

Damage Limit: Typically $0.50 per pound.

International Air Carriage

Governed by the Warsaw Convention:

Written Notice Required In the case of damage:

3 days for damage to baggage

7 days of receipt for damage to goods.   

14 days in the case of delay.

Damage Limit: US$9.07 per pound /US$20.00 per kilo for all damage."damages however founded."

See Changes under Montreal Protocol 4

  

Overview of Air Cargo Claims

Prior to airline deregulation, the U.S. Civil Aeronautics Board (CAB) reviewed filed tariffs of domestic air cargo carriers much like the Federal Maritime Commission (FMC) does today in the case of ocean freight shipments. Shippers 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 nine months and nine days from the date of shipment.

The U.S. 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 contractual rights of the performing air carrier. In short, the parties are free to contract with one another without significant government regulation.

On the other hand, international air carriage is governed by the Warsaw Convention. (Modified by Montreal Protocol 4). Although Warsaw does not require the filing of tariffs, Warsaw does force the parties to create documents and share information at a very precise level. As a result, international air carriage presents significant pitfalls for those who are careless and uninformed.

Sources of U.S. Domestic Air Claims Rules

To locate the cargo carrier's rule for loss and damage claims, the claimant should look to 3 basic sources:

_ air waybill;

_ air service guides;

_ air cargo tariff (Procedural manual).

The air waybill (MAWB or HAWB) 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.)

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. and are available at our "Air Cargo Central")

These same rules apply for the house air waybill (HAWB) of the indirect air carrier, i.e. the airfreight forwarder or 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.

Here is an Example, excerpted from IATA Air Waybill:

If the carriage involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and the convention governs and in most cases limits the liability of the carrier in respect of loss, damage or delay to cargo to 250 French gold francs per kilo gram, unless a higher value is declared in advance by the shipper and a supplementary charge paid if required. The liability of 250 French gold francs per kilo gram is approximately US $20.00 per kilo gram on the basis of US $42.22 per ounce of gold.

6. In case of loss, damage or delay of any part of the consignment, the weight to be taken into account in determining the carrier's limit on liability shall only be the weight of the package or packages concerned. Note: Notwithstanding any other provision, for foreign air transportation as defined in the U.S. Federal Aviation Act, as amended, in the case of loss or damaged or delay of a shipment or part thereof, the weight to be used in determining the carrier's limit of liability shall be the weight which is used (or a pro-rata share in the case of a part shipment loss, damage or delay) to determine the transportation charge for such shipment.

12. (1) The person entitled to delivery must make a complaint to the carrier in writing in the case (1) of visible damage to the goods, immediately after the discovery of damage and at the latest within 14 days from the receipt of the goods. (2) of the damage to the goods within 14 days from the date of receipt of the goods. (3) of delay, within 21 days of the date the goods are placed at his disposal, and (4) of non delivery of the goods within 120 days from the date of the issue of the airway bill."

These same rules apply for the house air waybill 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 the carrier's 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.

Sources of International Air Claims Rules

The United States has been a party to the Warsaw Convention since 1929, now modified by MP4) Generally, the Convention applies to air carriage between the territories of two High Contracting Parties to the Convention. For example, air carriage between the Untied States and England.

 Filing An Air Cargo Claim

This tutorial 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 must 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 description 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. Certainly 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.

FedEx also requires claimants to 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.

International air carriers must follow notice requirements of Warsaw. Art. 26 (3) of the Convention requires that every complaint must be made in writing and sent within the time limits. For International air carriage, according to the Warsaw Convention Art. 26 (2) the time limits are seven days from the date of receipt in the case of goods or in the case of delay complaints for delay must be made within 21 days from the date the cargo was placed at the persons disposal of the person entitled to delivery. No time limit is specified by the Convention for loss, however, some courts have held that the carries tariff, usually 120 days, controls. It is recommended that written notice be given as soon as possible.

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 in 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 concessions.

Limits on Liability

U.S. Domestic Air Carriage:

Governed by air waybill, common provisions are:

Damage Limit: Typically $0.50 per pound.

International Air Carriage:

Governed by Warsaw Convention:

Damage limit: US$9.07 per pound/$20.00 per kilo for all damage, "however founded."

Governed by Warsaw Under Montreal Protocol 4:

Damage limit: 17 SDR per kilo for all damage, "however founded."

See Changes Under Montreal Protocol 4

Written Notice Requirements

U.S. Domestic Air Carriage:

Governed by air waybill, common provisions are:

Written Notice Requirement:

Partial loss within 7 days.

Loss and non-delivery within 120 days.

International Air Carriage:

Governed by Warsaw Convention (MP4 Change):

Written Notice Requirement:

In the case of damage, 7 days of receipt for baggage,14 days of receipt for goods.

In the case of delay, notice within 21 days.

For non delivery (missing) there is no express Warsaw Convention provision, usual air waybill provision is 120 days.

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