One mistake that a lot of people make is to assume that the carrier, shipping company or freight forwarder is simply obliged to refund them the full value of whatever goods may be lost or damaged. After all, if your shoes fall apart the day after you buy them, you would expect to take them back to the shop and get a replacement pair, or a full refund!

This simple 'like for like' relationship does not work in the area of international transport and forwarding. If every forwarder had to pay out in compensation the full value of the goods they transported, most of them would go out of business in a very short space of time. That's because you - as a customer - are usually paying only a small proportion of the value of the goods for their forwarding services. Freight charges are based on the weight or volume of the goods transported; they are not usually related in any way to the actual value of the consignment.

As international trade has developed, so have a number of statutes and conventions which LIMIT the liability of the carrier to pay compensation to the goods owner. There are different conventions relating to different modes of transport such as air, sea and road, but they all have one thing in common; the compensation which the carrier (or their insurer) is obliged to pay out, is based on the WEIGHT ONLY of the lost or damaged goods.

Some customers express outrage at this - but the truth is that this limitation of liability applies in some way to all international transport provision; it is not imposed randomly by rogue freight forwarders who are just trying to be awkward!

There will be further articles about Freight liability and insurance to follow.