HOW CARGO INSURERS DEAL WITH MULTIMODAL TRANSPORTS

1
HOW CARGO INSURERS DEAL WITH MULTIMODAL
TRANSPORTS

• Nordic Marine Insurance Days 2007
• Marja Korkka

2
MULTIMODAL TRANSPORT Carriage with various
transport modes
Finland
Origin destination Transhipment Road
transport Sea transport Air transport
3
THE WEALTH OF LOGISTICS PROVIDERS AT YOUR SERVICE
!

• Terminal operator Road carrier
• MTO Stevedore Agent
• Air carrier NVOCC Broker
• Forwarder Warehouse keeper
• Owner CTO
• Rail carrier

4
SEPARATE WAYS OF ARRANGING THE TRANSPORT
Solution 1.

• The cargo owner contracts with every carrier /
  logistics
• provider separately

Cargo owner
Road
Sea
Air
Not feasible in most of the cases
5
SEPARATE WAYS OF ARRANGING THE TRANSPORT
Solution 2.

• The cargo owner contracts with a freight
  forwarder who
• in turn contracts with the service providers

Cargo owner
Agent or principal ?
Freight forwarder
Road
Sea
Air
6
WHAT IS TRUE MULTIMODAL TRANSPORT ?

• Carriage of goods with various transport modes
• under one contract
• where the MTO accepts
• door to door liability for goods
• from the time they come into his charge until
  they are delivered to the consignee

7
SEPARATE WAYS OF ARRANGING THE TRANSPORT
Solution 3.

• The cargo owner contracts with a MTO who arranges
• the transport with the help of subcontractors

Cargo owner
MTO
Road
Sea
Air
8
SOLUTION 3 - WHICH LIABILITY REGIME APPLIES ?

• 1980 Multimodal Convention (UNCTAD)
• 1975 ICC Model rules gt Standard form bills
• BUT no international convention in force
• gt MTOs liability is usually based on its own
  standard conditions

9
TWO WAYS OF CONSTRUING CARGO LIABILITY IN
STANDARD CONDITIONS

• UNIFORM SYSTEM
• all losses are subject to the same liability
  system
• NETWORK SYSTEM
• carriers liability is based on the existing
  unimodal liability systems applicable to the
  specific transport modes
• problem of unlocalised damage

10
THE EFFECT OF CONTAINERISATION

• In container transport the damage is often
  discovered only when the container is opened at
  the destination gt unlocalised damage
• Modified network system gt
• Catch all -provisions

11
UNIFORM v. NETWORK

• UNIFORM LIABILITY
• Predictability
• Problem Contradiction with mandatory unimodal
  regimes
• NETWORK LIABILITY
• Problem gaps may exist where carrier not liable
• before and after problem in sea carriage
• Problem Varying liability for each leg - amount
  of compensation dependant on chance

12
ADDITIONAL PROBLEM AREAS

• Basis of the liability
• strict liability, presumed fault, negligence
• Burden of proof
• Exclusions from liability
• Limitation of liability
• Notice of loss
• Time bar

13
IN SEARCH FOR A NEW ACCEPTABLE LIABILITY REGIME

• UNCITRAL Draft Convention on the carriage of
  goods wholly or partly by sea
• timetable
• Second reading completed last autumn
• Third reading to be completed autumn 2007
• Signing event September 2009 ?

14
UNCITRAL STATUS JUNE 2007

• Contractual carrier always liable for loss or
  damage to cargo as a principal based on presumed
  fault
• performing partiesliability towards cargo ?
• Door to door liability
• Limited network Convention will be overridden
  by other international non-marine conventions /
  also by mandatory national laws if contracting
  state so opts
• Error in navigation and management defence
  deleted
• Seaworthiness obligation for the whole voyage
• 2 year time bar

15
CARGO INTERESTS VIEW ON UNCITRAL DRAFT

• Harmonisation and unity ?
• Clarity / Simplicity
• Carriage must include sea leg
• Forwarders position
• No mandatory liability insurance
• Is there a real change in sight ?

16
Relax, well help you.