“We’ve become the number one selling
export software by listening to and meeting the needs of the
small and medium-sized U.S. companies that represent 97% of
all U.S. exporters,” said David Noah, President of Shipping
Solutions. “There are a number of really expensive export
software choices for the huge corporations. Shipping Solutions
represents an affordable and powerful choice for everyone else.”
Shipping Solutions Professional is available
for $1,499 for a single-user license, while a network version
– that includes a license to install the software on up
to four workstations – is available for $3,999. Both versions
of Shipping Solutions Professional include a one-year subscription
to the Annual Maintenance Program (AMP) that provides users
with free updates of the software, access to the Export Compliance
Module, and toll-free technical support.
Shipping Solutions Professional users who are
current subscribers to the AMP will receive the upgrade to version
7.1 free of charge. Users who’ve let their AMP subscription
lapse can upgrade for only $500 for a single-user license and
only $1,250 for the network version. Upgrade now, and Shipping
Solutions will include a one-year subscription to the AMP.
About Shipping Solutions
Upon its release in 1996, Shipping Solutions
quickly became the best-selling export documentation software.
Thousands of exporters use Shipping Solutions to prepare export
forms up to 80 percent faster than before and at a considerable
cost savings. Shipping Solutions’ customers range from
small and medium-sized companies, which make up the largest
percentage of companies that export, to large firms such as
Advanced Micro Devices (AMD), Dell Computers, Siemens International
and UPS Supply Chain Logistics. For more information on system
requirements and other information, please visit the Shipping
Solutions website.
By William J. Augello, Esq. email
| bio
Shipping goods in ocean vessels invokes special
problems for importers and exporters that must be addressed
through education and training in transportation laws. Failure
to understand the intricate terms and conditions of ocean bills
of lading and tariffs can result in unrecoverable losses and
unanticipated transportation costs. One of the most common causes
of adverse ocean shipping experience is when a cargo owner experiences
a loss, damage and delay to its cargo.
The liability regime governing the shipping
of cargo in ocean vessels contains several troublesome features
that could result in a cargo owner’s inability to recover
for the full amount of a loss, and in some cases, not recover
any amount from the carrier.
The first problem is the defense in the Carriage
of Goods by Sea Act (COGSA) that provides that if the loss resulted
from the ocean carrier’s “negligent navigation or
mismanagement of the ship,” the carrier is not liable
for the loss! This unconscionable defense is a carry-over from
the days of the wooden sailing vessels, when the risk of voyages
into unchartered waters and distant undiscovered lands was so
great that the ship owners and the cargo owners entered into
joint ventures and held each other harmless for any loss of
either the cargo or the ship. Eventually, the “negligent
navigation” defense was incorporated into the law of the
sea, and adopted in 1936 by the United States in the form of
COGSA.
This antiquated liability rule is still in
effect today despite the advances in technology experienced
in navigational aids, vessel construction and global communications.
There simply is no justification for the continuation of this
defense in the current environment, but it continues to plague
cargo owners nevertheless. (For a summary of the negligent acts
and omissions that have resulted in ocean carriers’ successful
defenses to claims, see Appendix 21 in Transportation,
Logistics and the Law, Second Edition)
The second problem is that ocean carriers’
liability is limited to $500 per package, or if not shipped
in packages, $500 per customary shipping unit (one truck, one
machine, etc.). If a cargo owner wants to be covered for the
full value of a shipment, it is incumbent on the shipper to
accurately describe on the ocean carrier’s bill of lading
the number of packages in the shipment. In doing so, the shipper
must state the smallest unit of packaging being used, such as
900 cartons of shoes; 11,000 bags of flour; 400 barrels of oil,
etc. Each package will then be covered by the carrier for its
value up to $500 per package.
This sounds simple, but the law books are full
of court cases where the ocean carrier attempted to limit its
liability to $500 for the entire 40-foot container, or to $500
per pallet, despite the shipper’s intent to declare the
smallest unit as the “Package.” This practice appears
to be a time-honored attempt by ocean carriers to limit their
liability to the lowest amount possible under any plausible
theory or to completely evade liability for their negligence.
To illustrate why cargo owners must become
more sophisticated in their preparation of shipping documents
before, during and after shipping, consider the Groupe Chegaray/
v. De Chalus v. P&O Containers, 251 F. 3d 1359 (11th
Cir. 2001) case decided in 2001, wherein the Eleventh Circuit
ruled that where the carrier makes a unilateral change in the
shipper’s pro-forma bill of lading description of the
cargo, and the shipper accepts the carrier’s final bill
of lading without objection, the shipper is bound by it, even
when the carrier’s bill of lading was issued after
the vessel had sailed.
In that case, the shipper’s freight forwarder
had originally prepared a pro forma bill of lading stating “42
pallets STC [said to contain] 2268 cartons + 2 cartons cosmetics.”
The shipper’s and its freight forwarder’s obvious
intent in stating the total number of cartons was to declare
each carton as a package with a maximum value of $500 per carton.
However, the ocean carrier issued its own bill
of lading, changing the language on the pro forma bill to read
“42 packages STC 2268 Cartons + 2 Cartons.”
The court limited the carrier’s liability to $500 times
44 packages (42 pallets + 2 cartons, or $22,000), rather than
to $500 times 2270 cartons, or $505,190.40. The court’s
reasoning was that the shipper did not complain when the carrier
changed the bill of lading description. Therefore it was deemed
to be both parties’ intent that each pallet be
deemed to be a package!
Why would a cargo owner knowingly or intentionally
agree to limit the carrier’s liability to $500 for the
whole pallet when the value of all the cartons on each pallet
was substantially greater? There was no difference in the rate
on the shipment. There was no other reason for doing so, but
the court penalized the cargo owner for not complaining about
the carrier’s unilateral act of changing the description
submitted by the freight forwarder, an act that was clearly
in the ocean carrier’s self-interest.
In light of that shocking decision by a U.S.
Circuit Court of Appeals, it would appear that shippers and
their forwarders must now carefully review bills of lading when
they are received from the carrier, match them against the forwarder’s
pro-forma bill of lading and/or the cargo owner’s shipping
instructions, and immediately notify the carrier if the description
varies from the shipper’s description in a manner that
will lessen the carrier’s liability. This practice should
be followed even when the ocean carrier’s bill of lading
is received after the ship leaves port.
In another case where containers fell overboard
due to improper storage (Fishman & Tobin, Inc. v .Tropical
Shipping & Construction Co. Ltd., 240 F. 3d 956, [11th
Cir. 2001]), the bill of lading read “1 X 40’ STC
39 Big Pack containing 27,908 units boys’ pants.”
In the clothing trade, the term “Big Pack” meant
“bundles.” The carrier’s liability was limited
to “39 bundles of pants” (“big packs”)
although each bundle contained dozens of pants totaling 2,325
dozen pants. The Court interpreted each bundle as a package
at $500 per bundle and awarded only $19,500 instead of the value
of 27,908 pants. Nowhere did the bill of lading state the number
of dozens of pants.
In a second circuit case, a shipper contracted
with a carrier to transport a shipment of garments in a specially
equipped container from El Salvador to Miami (American Home
Assurance v. Crowley Ambassador, 2003 WL 328301, 2003 U.S.
Dist. LEXIS 2072 [S.D.N.Y. 2003]). The garments were hijacked
before being loaded onto the ocean carrier. By the bill of lading
terms, COGSA was extended to apply to the period before and
after loading.
The container was identified on the bill of
lading as a “rack.” A rack is a special container
equipped with ropes to hang individual pieces of garments. Inside
the container were 22,355 pieces of garments allegedly worth
$400,000. The carrier argued that the rack, i.e., the container,
was the package. The shipper asserted that each item (which
was individually wrapped in plastic) in the rack was a package.
Citing two cases as precedent, the court held
“if the bill of lading lists the container as a package
and fails to describe objects that can reasonably be understood
from the description as being packages, the container must be
deemed a COGSA package.” However, “when a bill of
lading discloses on its face what is inside the container, and
those contents may reasonably be considered COGSA packages,
then the container is not a COGSA package.”
The court held that since the bill of lading
listed the container as the package and nothing else was provided
regarding a description of the garments in the rack, the shipper
was entitled to only $500.
Another shipper stated in the “number/quantity
of packages” column in the bill of lading only “1
X 40’”. However, in the “description”
column, its bill of lading stated “STC 5000 units men’s
jackets.” The cargo manifest indicated that 5,000 units
or packages were being shipped at a total value of $23,750.
Each jacket hanging in a plastic bag was considered in the industry
and by U.S. Customs to be one unit.
Nevertheless, the Eleventh Circuit ruled that
the carrier was liable only for $500 since the “number
of packages” column stated only “1 X 40’”,
thus evidencing the intent of both parties to treat the entire
container as the package. The court held that the bill of lading
must state in the “number of packages” column on
the bill of lading the number and type of packaging that the
owner desires to be subject to the $500 per package limitation.
Cargo owners must also be alert for individual
carriers’ attempt to apply their own definition of a package.
For example, Consolidated Freightways (CF) Combined Transport
Ocean Bill of Lading defined the term “container”
as “. . . any container, flat, pallet, or other form of
cargo carrying unit or equipment referred to on the face hereof
or in or on which any goods may be unitized or otherwise packed
or stored when received by the carrier for carriage hereunder
or subsequent to such receipt.” Further, the
bill of lading stated that “For purposes of this agreement,
a ‘Container’ is considered to be a ‘Package.’”
These clauses clearly reflect CF’s attempt
to limit its liability to $500 for the entire ocean container
or unitized form utilized by the shipper (pallet), or to the
units in which CF subsequently repackaged and shipped the cargo.
Important Lessons for Cargo Owners
Thousands of successful exporters are using Shipping
Solutions to complete their export documents faster, easier and
less expensively than ever before. Why aren't you?
If you're too busy trying to complete your export
documents by hand to spend some time reviewing the Shipping Solutions
Professional export documentation and compliance software yourself,
let us do it for you! Sign
up for one of our free online
demos and let us give you a one-hour overview of the software.
We'll take you step-by-step through the process
of completing your export forms, filing your SEDs electronically
through AES, and checking your exports against the various government
restricted parties lists and export regulations to make sure your
shipments are in compliance, and you—and your company—stay
out of trouble.
These free online demos are available
on Tuesday's at 1:00 Central Time. All you need is an Internet
connection to watch the demo and a phone to listen in and ask
questions about the software. It's the perfect opportunity to
get your first view of Shipping Solutions or to convince your
coworkers and your boss that Shipping Solutions is the perfect
solution for your company.
