The international legal cost of carriage of goods, a courier economic fable

By: Rehtafeht Johannus Lihp , staff writer

The main costs associated with international law in relation to contractual relationships are tied to logistics and transportation of goods.  Transportation guidelines in CISG carrier contracts for goods cover shipment and transshipment and in-transit contracts.  It does not matter which contract type is used, for our purposes it is enough to know that the risk of loss will not pass from seller to buyer until the goods are identified to the contract or otherwise available at the buyer’s disposal.

Transportation costs vary upon several factors including the number intermediaries.

Fortunately, a similar procedure is followed whether transporting goods by truck, rail or air. Intermediaries involved in the transportation of goods include warehouse workers at customs houses and port authorities, ship crew, freight forwarders and stevedores.  A stevedore formerly was a term synonymous with longshoreman or dock worker, however since the shipping container revolution of the 1950s dockworker jobs were cut down to a 10th of pre-revolution employment level.  Currently stevedores refer to firms that contracts with ship owners or a port that charters ships or loads and unloads ships.  Formerly stevedores were answerable to the ships logistics masters, and now a term for the masters themselves (Maclachlan, 1875, p.387.)

Another complication factor impacting contractual law of international transportation is that of the insurance of goods under carriage.  Maritime law is a universe unto itself.  In maritime logistics contracting the parties choose who is responsible for the purchase of the maritime insurance and who is to benefit from it.  Due to risk of loss, both parties has significant interest in seeing that the goods are properly insured during the duration of the transportation process and from carrier to carrier, freight forwarder to freight forwarder.  Aircraft carriage of goods regulations functions similarly to maritime transportation, but aircraft carriage is regulated by the 1929 Warsaw Convention.  This convention was formerly known as the Convention for the Unification of Certain Rules Relating to International Carriage by Air, but then there weren’t enough words left to use in the convention itself (August, 2009, p.581,607,610.)

Sources:

  • Machlachlan, D., (1875), A treatise on the Law of Merchant Shipping
  • August, Mayer and Bixby, 2009

Research funded in part by the Organic World Trade Organization.

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