1. Bills of Lading, Incoterms, and the Contract of Carriage
The bill of lading and the parties' chosen Incoterms together define who controls the cargo, who bears the risk of loss, and who has the right to bring a claim against the carrier.
What Is a Bill of Lading and What Legal Obligations Does It Create?
A bill of lading serves as a receipt for the cargo, evidence of the contract of carriage, and a document of title that allows the holder to claim the cargo at the destination or transfer it to a third party. The bill of lading also establishes the carrier's liability limits, the governing law, the jurisdiction for disputes, and any exceptions to carrier liability, and a shipper who fails to review the terms before loading may find that key rights have been inadvertently waived.
Logistics contracts and international trade contracts counsel can advise on the legal obligations created by a bill of lading and develop the contract of carriage review strategy.
How Does Incoterms 2020 Allocate Risk between Buyer and Seller?
Incoterms 2020 define the point at which risk of loss or damage transfers from the seller to the buyer, determining who must arrange and pay for transportation, insurance, and customs formalities. The most significant moment under each Incoterm is when the seller has completed its delivery obligation, because any loss or damage occurring after that point is at the buyer's risk even if the goods are still in transit.
| Incoterm | Risk Transfers When | Seller Arranges | Buyer Arranges |
|---|---|---|---|
| EXW | At seller's premises | Goods available at named place | All transport, export, insurance, import |
| FOB | When goods cross ship's rail at loading port | Delivery to port and export clearance | Ocean freight, insurance, import |
| CIF | When goods cross ship's rail (risk) | Freight and minimum insurance to destination | Import clearance; onward delivery |
| DAP | At named destination, before unloading | All transport, export; risk through delivery | Import clearance and duties |
| DDP | At named destination, before unloading | All costs including import duties and taxes | Unloading at destination only |
International trade and commerce and international contracts counsel can advise on the correct Incoterms selection and develop the contract terms and risk transfer strategy.
2. Cargo Claims: Maritime, Air, and Multimodal Transport
Cargo claims are governed by different liability regimes depending on the mode of transport, and the applicable convention determines both the standard of liability and the maximum amount the carrier must pay.
How Are Maritime Cargo Claims Governed and What Liability Limits Apply?
Maritime cargo claims in the United States are primarily governed by COGSA, which limits the carrier's liability to five hundred dollars per package unless the shipper declares a higher value in the bill of lading. The carrier can invoke seventeen enumerated defenses including act of God, inherent vice of the goods, and the nautical fault exception, which protects the carrier from liability for errors of navigation or management of the vessel.
Maritime litigation and shipping dispute counsel can advise on the applicable cargo liability convention, assess the strength of the claim and applicable limitations, and develop the claim filing and recovery strategy.
How Are Air Freight and Multimodal Transport Claims Handled?
Air freight claims are governed by the Montreal Convention, which caps the carrier's liability at seventeen Special Drawing Rights per kilogram unless the shipper declares a higher value at delivery, and the shipper must file written notice of damage within fourteen days or the claim will be time-barred. Multimodal transport contracts present complex liability questions because different conventions apply to different transport legs, and where the location of loss cannot be determined the multimodal transport operator's own liability terms govern.
Logistics transport and international dispute resolution counsel can advise on the liability regime for air freight and multimodal transport claims, assess the carrier's defenses, and develop the cross-modal claim strategy.
3. Force Majeure, Supply Chain Disruptions, and Demurrage
Supply chain disruptions and port congestion have made force majeure clauses and demurrage provisions among the most frequently litigated terms in international logistics contracts.
When Does Force Majeure Excuse Performance in a Logistics Contract?
A force majeure clause excuses a party from performance when performance is prevented by an event beyond its reasonable control that could not have been anticipated at contracting and cannot be mitigated by reasonable action, and the specific qualifying events and procedural requirements vary significantly depending on the contract language and governing law. Courts have consistently required parties invoking force majeure to prove that the event directly prevented performance and that reasonable mitigation steps were taken.
Supply chain disruptions and international trade disputes counsel can advise on whether a specific event qualifies as force majeure, assess notice and mitigation obligations, and develop the force majeure invocation and defense strategy.
What Are Demurrage and Detention Charges and When Can They Be Disputed?
Demurrage is the charge imposed when cargo is not collected from the port within the free time period, and detention is charged when equipment such as a container is not returned within the free time, and both can accrue rapidly on a per-container-per-day basis without notice to the cargo owner. A party disputing these charges should examine whether the free time clock was properly started, whether carrier-caused delays paused the free time, and whether the charges are correctly calculated against the published tariff.
Shipping dispute and logistics contracts counsel can advise on the contractual basis and calculation of demurrage and detention charges, assess whether the charges are correctly calculated, and develop the dispute strategy.
4. Logistics Outsourcing and Dispute Resolution
Most international logistics operations involve multiple service providers whose responsibilities must be carefully defined, and disputes are frequently subject to arbitration clauses that determine the forum and governing law.
What Are the Key Legal Risks in Outsourcing Logistics Operations?
The most significant legal risks in logistics outsourcing arise from the failure to define which party is responsible for cargo loss or damage, which party bears customs compliance liability, and how liability is allocated when a subcontractor causes the loss. A contract that relies on standard tariff terms with very low liability caps, or that allows unrestricted subcontracting, can result in the shipper bearing the full cost of a loss caused by the provider's subcontractor.
Logistics outsourcing and international business contracts counsel can advise on the key legal risks in the outsourcing arrangement, assess whether the service agreement adequately allocates liability, and develop the contract drafting strategy.
How Are International Logistics Disputes Resolved?
International logistics disputes are most commonly resolved through arbitration because logistics contracts routinely include arbitration clauses specifying a neutral forum, institutional rules, and a governing law that may differ from the country where cargo was loaded or discharged. The London Maritime Arbitrators Association and the Society of Maritime Arbitrators in New York are the most frequently used arbitral bodies for maritime disputes.
International arbitration and commercial litigation counsel can advise on the most effective forum for resolving the specific logistics dispute, assess whether arbitration or litigation is more favorable, and develop the dispute resolution and enforcement strategy.
27 Mar, 2026
