When a freight forwarder is entrusted with someone else's goods, they become legally responsible for taking all the necessary steps to protect and preserve that consignment. This means the forwarder is liable to the owner for any subsequent damage or loss.

However, the forwarder is legally entitled to limit the amount they are liable for, provided that these trading conditions have been agreed in advance.

Where goods are lost or damaged, it is possible that someone - during the transportation - has been negligent. If there has been negligence, there is likely to be a demand for compensation. The damage or loss might not have been the fault of the forwarder, but if it was caused by someone the forwarder is responsible for - such as a subcontractor - they will be liable as if it were.

Forwarding is not just about handling cargo - much of it is about using and providing information. For example, forwarders should know:

when a certain ship is due to leave

a country's import regulations

the current rate of duty for a particular product

If forwarders get this information wrong, and a client relying on its accuracy suffers a loss, the forwarder could be liable. However, they can use their trading conditions to limit the amount of compensation they will be liable for in the event of such mistakes.

To protect themselves against risks, forwarders can take out insurance to help cover any compensation they may become liable for.

( liyy )16 Feb,2011

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