CARGO CLAIMS EBOOK

Navigating Cargo Claims:

A Comprehensive Guide to
Managing Losses and Damage in
International Shipping
About OPTIMIZ
OPTIMIZ Ltd is a tech startup registered in the UK with operating offices in Douala, Cameroon.

OPTIMIZ provides an end-to-end cargo risk management platform. It enables the remote
inspection of containerised cargo and in case of damage, automates cargo claims.

www.optimiz.claims
hello@optimiz.claims
0049 160 343 9696

About StilFresh
StilFresh is a leading pan-African recovery company focused on helping international traders and
insurers manage their claims against liable third parties. It has offices in Cameroon, South Africa
and the United Kingdom.

www.stilfresh.co.uk
admin@stilfresh.co.uk
00237 2 43 68 49 49
CARGO CLAIMS EBOOK

Table of
Contents
01 Introduction

02 Types of Cargo Claims and Practical

Examples

03 Cargo Claims Management and Relevant

Documentation

04 International Conventions and Their Impact

on Cargo Claims

05 Common Challenges in Cargo

Claims Management

06 Best Practices for Effective Cargo Claims

Management

07 Leveraging Technology in Cargo Claims

Management

08 Technology Usecase

09 Resolved cases and market statistics

CARGO CLAIMSEBOOK

Introduction
The international shipping industry is the backbone of global trade, with
over 90% of world trade being carried out by ships. As the world becomes
increasingly interconnected, the shipping industry has had to adapt to
growing demand and more complex logistical challenges. In recent years,
this has been further exacerbated by global events like the COVID-19
pandemic, the Suez Canal blockage, and ongoing geopolitical tensions.
These events have highlighted the importance of effective cargo claims
management to ensure smooth operations and maintain trust between
shippers, cargo owners, and other stakeholders.

So, what is cargo claims?

In this ever-changing landscape, the management of cargo claims has

become a critical aspect of the shipping business. Cargo claims arise when
goods are damaged, lost, or delayed during transportation, leading to
financial losses for the involved parties. As cargo moves through multiple
jurisdictions, different carriers, and various modes of transportation, the
complexity of managing these claims increases. The efficient resolution of
cargo claims is essential not only to protect the financial interests of the
involved parties but also to maintain the reputation and trustworthiness of
the shipping industry as a whole.
CARGO CLAIMS EBOOK

Some of the key challenges faced by shippers and cargo owners when
dealing with cargo claims include navigating complex legal frameworks,
managing the collection and assessment of evidence, and ensuring timely
communication between all parties involved. Additionally, the global nature
of the shipping industry means that claims often involve multiple
jurisdictions and legal systems, further complicating the process.

This eBook aims to provide a comprehensive guide to managing losses and

damage in international shipping, with a particular focus on the complexities
of cargo claims. We will discuss the fundamentals of cargo claims, explore
the legal aspects, and delve into the common challenges faced by cargo
owners and shippers. Through real-world case studies, best practices, and
insights into the role of technology, we hope to equip readers with the
knowledge and tools necessary to navigate cargo claims effectively and
efficiently.

In the chapters that follow, we will cover various aspects of cargo claims
management, from understanding the basics of cargo claims to discussing
the legal frameworks and jurisdictions involved. We will also examine the
role of technology in streamlining cargo claims and explore the future of the
shipping industry. By the end of this eBook, you will have a better
understanding of the importance of effective cargo claims management and
be better equipped to handle the challenges that come with it in the
international shipping industry.
CARGO CLAIMS EBOOK

Types of Cargo Claims and Practical

Examples

In this chapter, we will explore the different

types of cargo claims that can arise during the
transportation of goods and illustrate them
with practical examples. By understanding
these various scenarios, cargo owners and
shippers can better prepare themselves to
handle claims effectively and efficiently.

Damage or Loss of Cargo

Delay in Delivery

General Average

Salvage Claims

Misdelivery

Contamination

Demurrage and Detention

CARGO CLAIMS EBOOK

Damage or Loss of Cargo

This is the most common type of cargo claim and occurs when goods are
damaged, lost, or destroyed during transportation. Damage can result from
various factors such as rough handling, improper stowage, exposure to the
elements, or accidents. For instance, a container of perishable goods may be
damaged due to a malfunctioning refrigeration unit, or a shipment of
electronics may be damaged by seawater ingress during a storm.

Delay in Delivery

Cargo claims can also arise when there is a significant delay in the delivery
of goods, causing financial losses for the cargo owner. Delays can occur due
to various reasons such as port congestion, labor strikes, or disruptions in
the supply chain. For example, during the COVID-19 pandemic, many
shipping lines faced significant delays due to port closures, quarantine
measures, and a shortage of available containers. This was also the case in
the recent strikes in South Africa and the UK.
CARGO CLAIMS EBOOK

General Average

General average is a principle of maritime law that applies when

extraordinary sacrifices or expenditures are made to preserve the ship and
its cargo. In such cases, the losses incurred are proportionately shared by all
parties involved, including the cargo owners.
(Reference: York Antwerp Rules)
For example, if a ship's cargo needs to be jettisoned to save the vessel from
sinking, the costs of the lost cargo are shared among all the cargo owners
and the shipowner.

Salvage Claims

When a ship and its cargo are in danger,

and third-party salvors step in to save
them, they are entitled to a salvage
reward.
(Reference: International Convention on
Salvage, 1989)
This reward is determined based on
factors such as the value of the property
saved, the degree of danger, and the
salvors' efforts. For instance, when the
container ship Ever Given blocked the
Suez Canal in March 2021, the salvage
team that successfully refloated the
vessel was awarded a salvage claim.
CARGO CLAIMS EBOOK

Misdelivery

Misdelivery occurs when cargo is delivered to the wrong consignee or

without proper documentation, leading to financial losses for the rightful
cargo owner.
For example, a shipment of valuable artwork may be mistakenly delivered
to the wrong art gallery, resulting in a claim for the loss of the artwork's
value.

Contamination

Contamination claims arise when the cargo is contaminated or tainted

during transportation, rendering it unusable or unsellable. For example, a
shipment of food products may become contaminated due to a leak in a
neighboring container carrying hazardous chemicals.
CARGO CLAIMS EBOOK

Demurrage and Detention

These are common in the shipping industry and can lead to significant
expenses for cargo owners and shippers. Demurrage occurs when
containers remain at the terminal beyond the allotted free time, resulting in
additional charges. Detention, on the other hand, refers to fees incurred
when containers are held outside the terminal after the free time has
expired.

For instance, suppose a cargo owner is shipping goods in a container that

has a seven-day free time at the destination port. If the container remains at
the terminal for 10 days before being collected, the cargo owner would be
responsible for paying demurrage charges for the additional three days.
Similarly, if the cargo owner takes the container off the port premises but
fails to return the empty container within the agreed-upon free time, they
will be charged detention fees.

It's crucial for cargo owners and shippers to understand the terms and
conditions related to demurrage and detention in their shipping contracts to
manage such claims effectively and prevent unnecessary costs.

In conclusion, the types of cargo claims are diverse, and their causes can be
multifaceted. By understanding the different scenarios in which claims can
arise, cargo owners and shippers can take proactive measures to minimize
potential losses and effectively manage claims when they occur. In the next
chapter, we will delve deeper into the 5 elements of cargo claims
management and discuss best practices for handling various claim
scenarios.
CARGO CLAIMS EBOOK

Cargo Claims Management and

Relevant Documentation

Delving into the world of cargo claims can be a complex and daunting
endeavor. With countless details to consider and numerous documents to
navigate, it is essential for cargo owners and shippers to have a firm grasp
on the intricacies of cargo claims. In this chapter, we will explore various
aspects of cargo claims, including calculations, documentation, and their role
in the shipping process. By gaining a deeper understanding of these
elements, you will be better equipped to manage claims effectively and
protect your interests in the shipping industry.

1. Communication: Timely and clear communication is crucial for

managing cargo claims. Informing all relevant parties about the
situation, including insurers, shipping lines, and cargo owners, can help

expedite the claims process. Maintaining open lines of communication

ensures that everyone is informed of the claim's progress and any
required actions.
2. Collection of Evidence: Gathering evidence is a vital step in cargo claims
management. This includes taking photographs of the damaged goods,
collecting documents such as bills of lading, invoices, and packing lists,
and obtaining expert reports or surveys to assess the extent of the
damage. Providing comprehensive evidence strengthens your claim and
increases the likelihood of a favorable resolution.
CARGO CLAIMS EBOOK

3. Causation: Determining the cause of the damage or loss is critical for

establishing liability. Understanding the chain of events that led to the
damage will help pinpoint the responsible party and strengthen your
claim. For instance, if a container is damaged during loading, the
stevedore may be liable, whereas if the damage occurred during transit,
the carrier may be responsible.

4. Accurate Loss Calculation: A crucial aspect of cargo claims

management is the precise calculation of the loss suffered. This involves
determining the actual value of the damaged cargo, any additional
expenses incurred, and potential loss of profit. The loss is generally
calculated as the difference between the arrived sound market value of
the cargo in the destination country and the arrived damaged value of the
cargo. Supporting documents, such as commercial invoices or sound
market value research from reputable sources, are necessary to
substantiate the claim. Understanding the intricacies of loss calculation is
vital for ensuring a successful claim.

5. Effective Claims Submission: Submitting a well-prepared and

comprehensive claim is vital for success in cargo claims management. This
involves gathering all relevant documents, including the bill of lading,
commercial invoice, packing list, and photographs of the damage.
Additionally, maintaining a detailed record of communication with the
shipping line throughout the process is essential. A strong claim
submission not only demonstrates the cargo owner's thoroughness but
also increases the likelihood of a favorable outcome. Properly
documenting each step and maintaining a systematic approach will help
build a solid foundation for the claim.
CARGO CLAIMS EBOOK

Relevant Documents and Their Purpose:

Bill of Lading: The bill of lading serves as a receipt for the goods shipped,
an evidence of the contract of carriage, and evidence of title to the goods.
It is a crucial document for proving the condition of the goods at the time
of shipment.

Commercial Invoice: The commercial invoice lists the goods being

shipped, their value, and the terms of the sale. It is used to calculate the
claim's value and may be required for customs clearance.

Packing List: The packing list provides details about the goods, their
weight, and how they are packed. It helps verify the cargo's contents and
can be used to identify any discrepancies in the claim.

Survey Report: A survey report assesses the extent of the damage and
provides expert opinion on the cause. It is a vital piece of evidence for
establishing liability and substantiating the claim.

Correspondence: Any relevant correspondence between the parties

involved in the shipment, such as emails or letters, can provide additional
evidence and context for the claim.

Photographs: Using digital solutions like that provided by OPTIMIZ to

collect evidence of handling and condition of cargo chronologically, is
proving to be essential especially in cases where there is no surveyor.
CARGO CLAIMS EBOOK

International Conventions and

Their Impact on Cargo Claims

In this chapter, we will delve into three major international conventions that
govern the carriage of goods by sea: The Hague Rules, The Hague-Visby
Rules, and The Hamburg Rules. We will highlight the specific rules and
articles relevant to cargo claims, offering an understanding of how these
conventions impact the claims process and the responsibilities of the
involved parties.

1. The Hague Rules (International Convention for the Unification of Certain

Rules of Law Relating to Bills of Lading, 1924)
The Hague Rules set the foundation for modern maritime law, defining the
rights and obligations of carriers and cargo owners. Key provisions related to
cargo claims include:

Carriers must "properly and carefully load, handle, stow, carry,

Article III,
keep, care for, and discharge the goods carried." This rule
Rule 2
establishes the carrier's duty of care towards the cargo.

This rule outlines a list of 17 defenses that carriers can use

Article IV, to limit their liability for cargo damage or loss. Examples
Rule 2 include "perils of the sea," "acts of God," and "insufficient
packing."
CARGO CLAIMS EBOOK

2. The Hague-Visby Rules (Protocol to Amend the International

Convention for the Unification of Certain Rules of Law Relating to Bills of
Lading, 1968)

The Hague-Visby Rules updated and expanded the Hague Rules, providing
additional protections for cargo owners and clarifying carrier responsibilities.
Key provisions related to cargo claims include:

This rule sets a one-year time limit for cargo claims, starting
Article III,
from the date of cargo delivery or when the cargo should have
Rule 6
been delivered. This is typically referred to as the ETA.

The carrier's liability for cargo loss or damage is limited to

Article IV, 666.67 SDR (Special Drawing Rights) per package or 2 SDR
Rule 5 per kilogram of gross weight, whichever is higher. This rule
establishes a monetary limit on the carrier's liability.

3. The Hamburg Rules (United Nations Convention on the Carriage of

Goods by Sea, 1978)

The Hamburg Rules aimed to create a more balanced legal framework

between carriers and cargo owners, with a focus on developing nations.
Key provisions related to cargo claims include:

The carrier is liable for cargo loss or damage occurring

between the time they take charge of the goods and their
Article 5
delivery unless the carrier can prove the loss or damage
resulting from circumstances outside their control. It also
holds them liable for delay.
CARGO CLAIMS EBOOK

This article expands the carrier's liability by limiting the

number of defenses available to them. Unlike the Hague and
Article 6
Hague-Visby Rules, the Hamburg Rules do not provide an
exhaustive list of exceptions, making it more difficult for
carriers to avoid liability.

The carrier's liability for cargo loss, damage, or delay is limited

Article 8 to 835 SDR per package or 2.5 SDR per kilogram of gross
weight, whichever is higher. This represents an increase in
liability limits compared to the Hague-Visby Rules.

The Hamburg Rules extend the time period within which a

Article 20 claim can be brought against a carrier from the 1 year
provided under Hague and Hague Visby Rules to 2 Years.
CARGO CLAIMS EBOOK

Common Challenges in
Cargo Claims Management

In the world of international trade, cargo claims management can be fraught

with difficulties. Stakeholders often encounter various challenges when
trying to navigate the complex legal landscape surrounding cargo claims. In
this chapter, we'll explore some of the most common challenges faced by
cargo owners and shippers when managing cargo claims, as well as offer
practical advice for overcoming these obstacles.

Time Limits

One of the main challenges in cargo claims management is adhering to strict time
limits imposed by international conventions, such as the Hague, Hague-Visby,
and Hamburg Rules. These conventions set specific timeframes within which
claims must be made, and failure to meet these deadlines can result in the loss of
the right to pursue a claim. To avoid this issue, it's crucial to be aware of the
applicable time limits and ensure that all necessary steps are taken well within
those timeframes.
CARGO CLAIMS EBOOK

Keep track of the relevant time limits for your claims, and establish a
system to monitor and manage deadlines. Consider using calendar
reminders or specialized software to ensure you stay on top of these
crucial dates.

Jurisdictional Issues

Another challenge in cargo claims management is navigating the complexities of

multiple jurisdictions. Since international shipments often involve various
countries and legal systems, determining the appropriate jurisdiction in which to
bring a claim can be difficult. Additionally, different jurisdictions may have
different legal requirements and procedures, adding further complexity to the
claims process.

Familiarize yourself with the legal systems and requirements of the

countries involved in your shipments. Consult with legal experts
experienced in the relevant jurisdictions to ensure you're following the
correct procedures and abiding by the applicable laws.
CARGO CLAIMS EBOOK

Proving the Extent of Damage

A critical aspect of cargo claims management is proving the extent of damage to

the cargo. This can be challenging, as it often requires gathering a range of
evidence, such as photographs, inspection reports, and expert opinions. Moreover,
the burden of proof usually, but not always, falls on the cargo owner or shipper,
making it essential to build a strong case backed by comprehensive
documentation.
Establish a robust system for documenting and preserving evidence related to
cargo damage. This includes taking photographs, retaining all relevant
shipping documents, and maintaining clear communication records with
carriers and other parties involved. Engaging experts, such as surveyors or loss
adjusters, to assess the damage can also be beneficial in building a solid case.
The OPTIMIZ application is ideal for this.

Navigating Legal Defenses

Carriers often employ various legal defenses to avoid or limit their liability
in cargo claims. Understanding and countering these defenses can be
challenging for cargo owners and shippers, particularly when dealing
with complex legal concepts and international conventions.

To navigate legal defenses effectively, it's essential to have a solid

understanding of the applicable laws and conventions. Consult
with legal experts to ensure you're well-informed about the
relevant legal framework and prepared to counter any defenses
presented by carriers.
CARGO CLAIMS EBOOK

Best Practices for Effective Cargo

Claims Management

Successfully managing cargo claims requires a proactive and organized

approach. In this chapter, we'll outline some best practices to help cargo
owners and shippers effectively manage their claims and minimize the risk of
disputes.

Implement a Robust Record-Keeping System

A strong record-keeping system is essential for building a solid case in the event of
a cargo claim. Make sure to keep all relevant documentation, such as bills of lading,
shipping contracts, invoices, packing lists, and inspection reports. Additionally,
maintain clear communication records with carriers, freight forwarders, and other
parties involved in the shipping process.

Use a centralized system, such as specialized software or a well-organized

filing system, to store all relevant documents and correspondence. Establish a
standardized procedure for documenting and archiving information to ensure
consistency and ease of access.
CARGO CLAIMS EBOOK

Conduct Thorough Inspections

Regular inspections of the cargo at various stages of the shipping process can help
identify any issues early on, allowing for prompt resolution and minimizing the risk
of disputes. Make sure to inspect the cargo upon receipt, during loading and
unloading, and upon delivery to the consignee.

Develop a standardized inspection procedure and ensure that all relevant

personnel are trained in conducting thorough inspections. Document the
inspection findings, including photographs and written reports, and maintain a
record of these inspections.

Establish Clear Communication Channels

Effective communication is crucial in cargo claims management. Ensure that all

parties involved in the shipping process are aware of their responsibilities and the
channels through which they should communicate any issues or concerns.

Establish a designated point of contact for each party involved in the shipping
process, such as the carrier, freight forwarder, and consignee. Implement a
system for tracking and managing communication, and make sure to
document all important correspondence.
CARGO CLAIMS EBOOK

Understand the Applicable Laws and Regulations

Having a comprehensive understanding of the laws and regulations governing

cargo claims is vital for effectively managing claims and protecting your interests.
This includes being familiar with international conventions, such as the Hague,
Hague-Visby, and Hamburg Rules, as well as the laws and regulations of the
countries involved in the shipment.

Consult with legal experts to ensure you're well-informed about the relevant
legal framework, and stay up-to-date on any changes or developments in the
laws and regulations governing cargo claims.

Develop a Dispute Resolution Strategy

Despite your best efforts, disputes may sometimes arise in the course of cargo
claims management. Having a clear dispute resolution strategy in place can help
minimize the impact of such disputes and facilitate a more efficient resolution.

Consider incorporating dispute resolution clauses in your shipping

contracts, specifying the preferred method of resolving disputes (e.g.,
mediation, arbitration, or litigation). Engage legal experts early on in the
dispute resolution process to ensure the most favorable outcome for
your claim.
CARGO CLAIMS EBOOK

Leveraging Technology in Cargo

Claims Management

In today's digital age, technology plays a critical role in streamlining and

enhancing various aspects of cargo claims management. This chapter will
explore how cargo owners and shippers can leverage technology to improve
the efficiency and effectiveness of their claims management process.

Electronic Document Management

An electronic document management system (EDMS) can help cargo owners and
shippers maintain well-organized and easily accessible records of all relevant
documents, including bills of lading, shipping contracts, invoices, packing lists,
and inspection reports. Additionally, it simplifies the process of sharing
documents with other parties involved in the shipping process.

Implement an EDMS tailored to the needs of your organization, and

ensure that all employees are trained on using the system effectively.
CARGO CLAIMS EBOOK

Cargo Tracking and Monitoring Solutions

Cargo tracking and monitoring solutions, such as GPS tracking and IoT sensors,
can provide real-time visibility into the location and condition of your cargo. This
can help you identify potential issues early on and take proactive measures to
mitigate risks.

Evaluate various cargo tracking and monitoring solutions to determine the

most appropriate technology for your specific needs. Invest in a solution that
provides real-time data and alerts, enabling you to take timely action in case of
any issues.

Data Analytics and Reporting Tools

Data analytics and reporting tools can help cargo owners and shippers
gain valuable insights into their shipping operations, identify trends, and
uncover areas for improvement. These tools can also be instrumental in
identifying patterns and root causes of cargo claims, enabling
organizations to take targeted measures to prevent future claims.

Invest in data analytics and reporting tools that provide actionable

insights and easy-to-understand visualizations. Encourage data-
driven decision-making within your organization to optimize your
shipping operations and minimize cargo claims.
CARGO CLAIMS EBOOK

Communication and Collaboration Platforms

Effective communication and collaboration are essential for successful cargo

claims management. Cloud-based communication and collaboration platforms
can help streamline the exchange of information between various parties involved
in the shipping process, facilitating efficient communication and timely resolution
of issues.
Evaluate various cargo tracking and monitoring solutions to determine the
most appropriate technology for your specific needs. Invest in a solution that
provides real-time data and alerts, enabling you to take timely action in case of
any issues.

Automation and AI

Automation and artificial intelligence (AI) can be employed to simplify and

optimize various aspects of cargo claims management, such as document
processing, data analysis, and even decision-making. By automating routine
tasks, cargo owners and shippers can free up time and resources for more
strategic activities.
Explore automation and AI solutions that can streamline your
cargo claims management process. Identify the areas where
automation can have the most significant impact and prioritize the
implementation of these solutions.

By embracing technology, cargo owners and shippers can enhance their

cargo claims management process, improving efficiency, reducing risk,
and ultimately, minimizing the occurrence of cargo claims in their shipping
operations.
CARGO CLAIMS EBOOK

Technology Usecase

A Ghanaian banana exporter was experiencing significant fruit

damage during transit, leading to substantial financial losses. Their
claims were frequently rejected by shipping lines, despite
spending a considerable amount on inspections.

Image of mobile phone used in collecting handling evidence and asurveyor.com dashboard to
visualise collected data.
CARGO CLAIMS EBOOK

After engaging our services, we began by mapping out their internal processes in
Ghana. We digitized the handling and stuffing process, enabling the exporter to
capture photos, short videos, and structured texts that documented the cargo's
journey objectively.

Digitising the cargo handling process of an exporter from boxing to containerisation.

CARGO CLAIMS EBOOK

This information was made accessible in real-time via their customized dashboard.
From there, the exporter could share vital data with their buyer in Italy, who, in
turn, could relay the cargo's outturn status to the customer in Ghana.

Sample automated inspection report.

CARGO CLAIMS EBOOK

The result of implementing our cargo claims management system was remarkable.
The exporter saved USD 58,000 in inspection fees and successfully recouped claims
from shipping lines. This streamlined approach to cargo claims management not only
improved their bottom line but also strengthened their business relationships with
both buyers and shipping lines.

Claims administration dashboard

Get Started
Schedule a demo

Or get in touch: hello@optimiz.claims

CARGO CLAIMS EBOOK

Solved Cases

In this final chapter, we will share with you cases that have been resolved by
expert claims handlers at StilFresh.

Damaged X Ray Machine

Cargo: Circular full-body Xray Machine

Transit: Europe - South Africa
Mode of Transit: Air shipment
Claim Amount: USD300K
Cause of Damage: Breakage in transit
Defenses from Carrier: Defective packing, lack of sufficient evidence.
Arguments by StilFresh: StilFresh argued that it was not a case of defective
packaging rather, it was of poor handling. After first
offer, they went on to revise the offer by arguing that
the weight to consider was not only that of the
damaged package but the gross weight of all parts
which rely on the damaged part to be functional.
Settlement Amount: USD180K
CARGO CLAIMS EBOOK

Damaged Fresh Grapes

Cargo: 2056 cartons of fresh grapes

IncoTerm: CIF London Gateway
Mode of Transit: Sea shipment
Claim Amount: GBP40K
Cause of Damage: Temperature violations
Observations: Even though the temperature was not maintained, this
was exacerbated by change from warm region to
winter in Europe. This resulted in discolouration and
dehydrated stem.
Settlement Amount: GBP35K
CARGO CLAIMS EBOOK

Damaged Impregnated Paper at Port

Cargo: Several pallets of impregnated paper product

Cause of Damage: The container fell from the port gantry crane during offloading
operations, landing on another container still on board the vessel.
Settlement Amount: EUR15K
Legal Challenges: Determining liability for the container incident and the subsequent
handling and storage of the cargo, which was exposed to inclement
weather conditions.
Arguments for Claimant:
The container was severely damaged and unrepairable, with cargo spilling out and
pallets being broken. The nature of the cargo demanded careful handling and storage,
which was not provided after the incident. The container incident and subsequent
handling led to the deterioration and damage of the majority of the cargo, rendering it
unfit for its intended purpose.
CARGO CLAIMS EBOOK

Autoparts damaged in Road Accident

Cargo: A consignment of Autoparts

Cause of Damage: Truck accident
Claim Amount: ZAR 250K
Facts:
The cargo was shipped from Germany to South Africa was involved in a truck
accident while en route to Pretoria on the N1 freeway .
Damaged components included wheel bearings, engine mounts, and other critical
parts for motor vehicles.

Legal Challenges:
There is no strict liability in South Africa. So the claimant is expected to prove
negligence. The damaged components are considered safety-critical and cannot
be salvaged, leading to disposal through usual processes.
Disposing of the parts requires the involvement of customs to maintain the duty
rebate agreement in place.

Arguments for Claimant:

The claim was successfully brought against subcontracting party who had a
contract in place with main contractor. This meant the need for prove of
negligence was no longer necessary as provided by the subcontract.

Contract clause: The Supplier shall procure adequate goods in transit insurance against all
risks relating to provision of Services.The policy must be valid for geographical region in
which the Services are to be rendered. The insured limits of the policy, per load, must de
commensurate witn the value of the cargo evidenced by the relevant documentation or
declared for customs purposes.
CARGO CLAIMS EBOOK

Reefer cargo contamination

Cargo: South African grapes (3,330 cartons/crates)

Transit: From Cape Town

Cause of Damage: Fish smell contamination during transport due to the haulier using a truck
previously loaded with fish without proper cleaning or ventilation.

Facts: Grapes were transported from the packing station in a reefer truck. The contamination
occurred during transport. The cold store refused the consignment for storage due to the
strong fish smell. Despite forced cooling, the grapes remained unfit for export and were sold
on the local market at a loss.

Legal considerations: The transporter failed to ensure that the truck was adequately cleaned
and prepared before transporting the grapes, resulting in contamination and damage.

Arguments for claimant:

Grapes were in sound condition prior to transport.
Fish smell contamination occurred during transport.
Reasonable measures were taken to mitigate the loss but were unsuccessful.
The total damage amounts to ZAR 434,213.09 (approximately €28,519.40 at the date of
loss).

Contamination can have severe consequences for the quality and value of perishable items.
In this case, the fish smell contamination rendered the grapes unfit for export, resulting in
significant financial losses.
CARGO CLAIMS EBOOK

Application of Hamburg Rules

Introduction:
A claim was filed regarding alleged damage to a cargo of fruits during transport. The carrier
rejected the claim, stating the container was delivered in sound condition and they were not
responsible for verifying the quality and quantity of goods. The claimant argued that the
Hamburg rules apply and that the claim is not time-barred. They urged the carrier to revise
their position and negotiate on the merits of the claim.

Background:
The cargo was shipped from Durban, South Africa, to Dar es Salaam, Tanzania. Upon arrival,
the claimant discovered damages to the cargo and sought compensation from the carrier.
The carrier asserted that the container was delivered without any remarks and in sound
condition, and reminded the claimant of their responsibility to promptly report any damages
and provide evidence, such as photographs. The carrier also referred to the bill of lading,
which states that they were not responsible for checking the quality and quantity of goods.

Analysis:
The claimant argued that the Hamburg rules apply in this case, as Tanzania is a signatory to
the convention. They cited section 2(1)(b) and section 20(1), which states that any action
relating to the carriage of goods is time-barred if judicial or arbitral proceedings have not
been instituted within a period of two years. The claimant maintained that their claim was
not time-barred, as they had initiated proceedings within the specified time frame.

The carrier's rejection of the claim is based on their assertion that the container was
delivered in sound condition and that they were not responsible for the quality and quantity
of goods. However, the claimant contends that the carrier's position lacks legal backing and
is in breach of the applicable convention, i.e., the Hamburg rules.

Conclusion:
Given the information provided, the claimant's reliance on the Hamburg rules seems
justified. The carrier's rejection of the claim appears to be unsupported by the relevant legal
provisions, and the claimant has a valid argument for seeking compensation for the alleged
damages. To reach a resolution, both parties should engage in negotiations and consider the
merits of the claim in light of the applicable legal framework.
CARGO CLAIMS EBOOK

Tips for a Claimant:

Ensure that all required documentation is in order, including photographs of the

damaged goods, shipping documents, and any relevant correspondence with the carrier.
Familiarize yourself with the applicable legal framework, such as the Hamburg rules or
any other conventions governing the carriage of goods by sea.
Communicate promptly with the carrier and seek an amicable resolution, but be
prepared to assert your legal rights if negotiations do not yield satisfactory results.
Consider engaging the services of a recovery agent like StilFresh to assist with the claim
process and provide expert advice on the applicable legal provisions.
Keep a detailed record of all communications with the carrier, as well as any evidence of
damage or loss, which may be critical in supporting your claim. Use OPTIMIZ.
Be persistent and follow up with the carrier regularly to ensure that your claim is being
given due consideration.
Be open to negotiation and compromise, as reaching an amicable settlement may be
more beneficial and time-saving than pursuing lengthy legal proceedings.
In case negotiations fail, be prepared to escalate the matter through judicial or arbitral
proceedings within the stipulated time frame, as outlined in the applicable legal
framework.
Stay updated on any developments or changes in the relevant laws and regulations, as
they may impact your claim and the available remedies.
Learn from your experience and implement measures to minimize the risk of cargo
damage in the future, such as ensuring proper packaging, stowing, and handling of
goods during transportation.
CARGO CLAIMS EBOOK

Cargo Claims Trends

CARGO CLAIMS EBOOK

Cargo Claims Trends

59%Fruits
6%
Fish and Meats
1%
Vegetables

3%
Cars and Machinery
8% 5%
Grains Pharmaceuticals
CARGO CLAIMS EBOOK

Summary
This eBook serves as a comprehensive guide for
cargo owners and shippers, providing essential
insights into managing cargo claims in the
shipping industry. We explored key aspects such
as contracts, legal frameworks, types of claims,
and the role of experts in the claims process.
Using real-life examples and case studies, we
illustrated the challenges faced by stakeholders
and offered practical advice for overcoming
these obstacles.

By understanding the intricacies of cargo claims

management and staying informed about the
latest developments, cargo owners and shippers
can protect their business and ensure successful
outcomes. This guide equips readers with the
knowledge and tools needed to navigate the
complex world of cargo claims, safeguarding
their interests and maximizing the chances of
favorable claim resolutions.
 CARGO CLAIMS EBOOK

Contributors

Kingsly Kwalar, LLM

Founder and CEO

Marcel Ngibip, MICS

Global Claims Lead

Anitia Che, LLM

Cargo claims Handler

Foku Lonyem
Cargo claims Handler

Rene Ntoko, PhD

Claims Handler

Kelly Nkomglah
Digital Marketing

Copyright 2023 © Jointly held by OPTIMIZ and StilFresh. All rights reserved. Users of this report may reproduce or transmit it verbatim only. Any
other use, including derivative analyses based on this report, in any form or by any means is subject to prior permission in writing from the
copyright holders