Liability of Air Carriers
Interlink編集部What Is the Liability of an Air Carrier?
The liability of an air carrier refers to the damage compensation responsibility the carrier bears when loss, damage, or delay occurs during air transport of cargo it has accepted, specifically related to the obligation to properly manage the cargo during flight and deliver it at the destination.
When damage occurs to air cargo, it is first important to determine which convention applies, then to identify who the carrier is, followed by confirming liability limits, damage notification periods, and statutes of limitations.
Unlike maritime transport, in air transport, the understanding of liability may differ depending on which air carriage conventions the departure and arrival countries are parties to. Therefore, in practice, confirming the convention commonly applicable to both the origin and destination country is the starting point.
Also, air cargo shipments often involve Air Waybills (AWB), House Air Waybills (HAWB), Master Air Waybills (MAWB), consolidators, and actual carriers, which means the carrier named on the documentation may differ from the airline that physically transported the cargo. Hence, if a cargo incident occurs, it is necessary to comprehensively check the applicable conventions, AWB details, contractual relationships, liability limits, and notification deadlines.
Scope Covered in This Article
| Theme | Covered in This Article | Details Covered in Other Articles |
|---|---|---|
| Basics of Air Carrier Liability | Organizes the liability structure of air carriers for loss, damage, and delay of air cargo. | Specific damage assessment for individual incidents, surveys, and insurance claims handling are covered in articles on cargo accidents and insurance practice. |
| Applicable Conventions | Clarifies the relationship between the Warsaw Convention, Hague Protocol, Montreal Protocol No. 4, and Montreal Convention. | Details on ratification status by country, domestic implementation laws, and article-by-article commentary on the conventions are to be confirmed through specialized resources. |
| Contractual Carrier and Actual Carrier | Clarifies relationships between AWB, HAWB, MAWB, consolidators, and airlines. | General differences between contractual and actual carriers are handled in separate articles. |
| Liability Segments in Air Transport | Organizes the treatment of air transport segments including in-flight, land transport outside the airport, and transport related to loading, delivery, or transshipment. | Segmentation of accident locations and responsible parties in multimodal transport is covered in articles on accident occurrence segments and liability entities. |
| Damage Notification Periods and Statutes of Limitations | Summarizes basic periods such as 7-day and 14-day damage notifications for damage, 14-day and 21-day for delay, and 2-year statutes of limitations. | Specific details on suspension of limitation periods, lawsuit filing, and management of subrogation deadlines require expert confirmation. |
| Liability Limits | Explains the basic concepts of 250 gold francs per kg, approximately US$20 per kg, SDR per kg, declared value, and exclusion of liability limits. | SDR conversion, airline terms, and treatment under individual domestic laws should be checked case-by-case. |
| Relation to Cargo Insurance | Outlines practical supplementation by marine cargo insurance for amounts unrecoverable from the air carrier, subrogation, and preservation of evidence. | Coverage scope of cargo insurance, insurance claim procedures, and subrogation details are covered in insurance practice articles. |
Basic Principles of Air Carrier Liability
The air carrier is obligated to properly manage the accepted cargo during air transport and deliver it at the destination. If loss, damage, or delay occurs, the carrier is liable for damages within a certain scope.
However, this liability is not always unlimited. The recoverable amount and possibility of claims vary based on the applicable air carrier conventions, AWB terms, liability limits, damage notification periods, and statutes of limitation.
Moreover, the same rules do not apply in every situation; in principle, the air carrier conventions apply only during air transport. Therefore, when multimodal transport or land transport outside the airport is involved, it is necessary to carefully confirm the extent of the air carrier’s liability segment.
Key Points to Check First
- Which air carriage convention is commonly applicable to both the origin and destination countries?
- Who is the contractual carrier?
- Is there a separate actual carrier?
- Will the claim be based on HAWB or MAWB?
- Can the damage be considered to have occurred during air transport?
- Is the land transport outside the airport incidental to the air carriage contract?
- Will the damage notification period be met?
- Will the statute of limitations be met?
- What is the liability limit amount?
- Is there a declared value on the AWB?
- Is there potential for subrogation by the cargo insurer?
Applicable Conventions
The main conventions relevant in air transport are the Warsaw Convention, Hague Protocol, Montreal Protocol No. 4, and Montreal Convention.
These are separate conventions, and applicability depends on which treaties each country has ratified. In practice, it is important to confirm the most recent convention jointly applicable to the countries of the origin and destination airports.
This approach is based on the principle that, when there are multiple conventions covering the same parties on the same subject, the later signed or ratified convention takes precedence. Therefore, it is necessary to check not just which conventions countries have joined, but which most recent conventions both countries commonly apply.
The ratification status of the origin and destination countries is confirmed through ICAO’s treaty database, each country’s civil aviation authority, airline terms and conditions, and AWB back-of-document clauses. If this initial check is overlooked in an air cargo incident, it may lead to incorrect judgments about liability limits, notification periods, and statutes of limitations.
For example, if one country is party to the Warsaw Convention, the Warsaw Convention as amended, and Montreal Protocol No. 4, and the other country is also party to the same set, Montreal Protocol No. 4 would apply for that segment. Conversely, if their ratification statuses do not align, an older convention may be applicable.
History of Conventions Related to Air Transport
| Treaties & Protocols | Positioning | Practical Significance | Points to Confirm |
|---|---|---|---|
| Warsaw Convention | Basic framework for carrier liability in international air transport. | Issues arise with old liability limitation systems and fault-based liability principles. | Confirm whether the origin and destination countries are related only by the Warsaw Convention. |
| Hague Protocol | A protocol that amends the Warsaw Convention. | Check liability relationships as partial amendments to the Warsaw Convention. | Verify if the counterpart country has ratified the Hague Protocol. |
| Montreal Protocol No. 4 | A protocol modernizing the liability system for air cargo transport. | Liability limitations based on SDR/kg for cargo become relevant. | Confirm ratification status of both origin and destination countries and check the AWB terms. |
| Montreal Convention | A treaty that integrates and modernizes the Warsaw Convention system. | Comprehensively check contract carriers and actual carriers, liability limits, notification periods, and statute of limitations. | Verify that both origin and destination countries are contracting parties to the Montreal Convention. |
Contract Carrier and Actual Carrier
In air transport, the party contracted by the shipper and the party actually responsible for carriage may not be the same.
In particular, when freight forwarders or consolidators issue HAWBs, and airlines issue MAWBs, it is necessary to distinguish between the contract carrier and the actual carrier.
The Montreal Convention provides that both the contract carrier and the actual carrier are subject to the treaty. Therefore, it is important to separately organize the situations where the shipper files claims against the freight forwarder or consolidator, and where the freight forwarder seeks recourse from the airline.
On the other hand, under the Warsaw Convention system, the definition of carrier is not clearly specified, and in practice, the focus is often on the contract carrier. Accordingly, it is important to check the AWB details, the relationship between HAWB and MAWB, the transport contracts, and the actual transportation arrangements to avoid misidentifying the liable party.
Relationship Between HAWB and MAWB
| Item | HAWB | MAWB | Practical Notes |
|---|---|---|---|
| Official Name | House Air Waybill | Master Air Waybill | Confirm which document forms the basis for the claim. |
| Issuer | Freight forwarders, consolidators, etc. | Typically issued by the airline. | Confirm whether the shipper directly holds the HAWB or MAWB. |
| Primary Parties Involved | Indicates the relationship between shipper and freight forwarder/consolidator. | Indicates the relationship between freight forwarder/consolidator and airline. | There may not be a direct contractual relationship between shipper and airline. |
| Contract Carrier | HAWB issuer may be regarded as the contract carrier. | Airline is involved as the actual carrier or contract carrier. | Manage shipper interactions and airline recourse claims separately. |
| Liability Conditions | Freight forwarder’s terms, consolidator’s terms, and HAWB conditions are relevant. | Airline terms, air transport treaties, and MAWB conditions are relevant. | Notification periods, jurisdiction, and liability limits may differ between HAWB and MAWB. |
Scope of Application
Air carrier liability generally applies only during air transport. Under the Montreal Convention, land transport, sea transport, and inland waterway transport occurring outside airport premises are generally not considered part of air transport.
However, attention is needed for land, sea, or inland waterway transport that is incidental to loading, delivery, or transshipment, or that is treated as a continuous transport under the air transport contract.
Additionally, if the carrier substitutes air transport with another mode of transport without the shipper’s consent, that transport period may also be regarded as air transport.
In such cases, even damages occurring during truck transport may be treated as part of the air transport contract, bringing air treaty liability limitations into play.
Therefore, in multimodal transport, do not simply assume that “because damage occurred during the truck leg, air transport treaties are irrelevant.” It is necessary to confirm whether the land transport is incidental to air transport and whether it is included in the carrier’s or consolidator’s transport contract.
Comparison of Liability Sections
| Section | Potential Issues with Airline Carrier Liability | Main Documents to Confirm | Practical Points to Note |
|---|---|---|---|
| After acceptance at airport warehouse | It becomes an issue if the cargo is under the management of the air transport contract. | AWB, warehouse receipt records, delivery-in records, remarks | Check the external condition of the cargo at the time of acceptance. |
| During loading and stowing on the aircraft | This is a section where airline carrier liability is often an issue as part of air transportation management. | Loading records, airline records, accident reports | Verify cargo handling, temperature control, and dangerous goods management. |
| In flight | This is the core section of the airline carrier liability. | AWB, airline accident reports, arrival records | Check for delays, temperature deviations, and causes of damage. |
| Unloading and storage at arrival airport warehouse | It becomes an issue as under the management of the airline carrier or warehouse operator. | Arrival records, warehouse records, abnormality memos, photos | Distinguish cargo condition before and after delivery. |
| Land transport outside the airport | In principle, this is not included in air transportation but may become an issue if incidental transport. | Delivery slips, delegation contracts, HAWB, MAWB, delivery records | Confirm whether it is part of the air transport contract or a separate domestic transport contract. |
| Section where the carrier substituted transport without permission | May be considered as part of air transportation. | Transport instructions, substitute transport records, shipper’s consent status | Check whether substitution was made without shipper’s consent. |
Damage Notification Period
For cargo damage, delayed notification to the carrier puts claims at a disadvantage. The notification period varies depending on the applicable convention.
| Type of Damage | Warsaw Convention | Hague Protocol, Montreal Additional Protocol No.4, Montreal Convention | Practical Points to Note |
|---|---|---|---|
| When cargo is damaged | Within 7 days from the cargo receipt date. | Within 14 days from the cargo receipt date. | If abnormalities are found on receipt, immediately issue a written reservation notice. |
| In the case of delay | Within 14 days from the date the cargo became available for disposition. | Within 21 days from the date the cargo became available for disposition. | For temperature-controlled or seasonal cargo, also retain delay damage documentation. |
If no written objection is made within the notification period, the cargo is presumed to have been delivered in good condition, and liability of the carrier is generally treated as not applicable. While rebuttal is possible, this can be a significant disadvantage to the shipper and insurer.
Therefore, in practice, if the cargo shows abnormalities, it is safest to immediately issue a reservation notice upon receipt and include photos, inspection records, abnormality memos upon arrival, and Survey Report results with the claim notification.
Limitation Period for Filing Suit
The limitation period for claims against airline transport is in principle two years. This period starts from the date of arrival at the destination, the date the aircraft should have arrived, or the date transport was abandoned.
The notification period and limitation period are separate. Even if notification is made, if the limitation period expires without filing suit or making a formal claim, the right to enforce a claim becomes difficult to exercise. Therefore, both need to be managed separately.
Additionally, claims against HAWB issuers, recourse against the airline named on the MAWB, and claims against airport warehouse operators or domestic transporters may each have different applicable deadlines. For air cargo incidents, it is important to manage deadlines separately for each party involved.
Differences Between Damage Notification Period and Limitation Period
| Item | Damage Notification Period | Limitation Period | Practical Points to Note |
|---|---|---|---|
| Purpose | Period to lodge objections with the carrier regarding cargo damage or delay. | Period during which legal claims can be filed. | Notification alone does not fulfill the limitation period requirement. |
| Typical Duration | 7 or 14 days for damage, 14 or 21 days for delay. | Generally 2 years. | Notification period varies by applicable convention. |
| If Neglected | Presumed delivery in good condition; disadvantageous effect. | Claim rights become difficult to enforce. | Manage both deadlines upon discovery of an incident. |
| Parties Covered | Notification issues concern HAWB issuers, airlines, warehouse operators, and delivery companies. | Check separately for contractual carriers, actual carriers, and related parties. | Create a deadline management chart for each party involved. |
Liability Limits
Liability limits for airline carriers vary according to the applicable convention.
Warsaw Convention and Hague Protocol
Under the Warsaw Convention and Hague Protocol, the liability limit for cargo is 250 gold francs per kilogram. In practice, this is often approximated as about US$20 per kg, but in current international air cargo practice, this old system applies only to limited sections.
For cases where such low liability limits apply, recovering damages from the carrier alone is challenging, highlighting the critical importance of marine cargo insurance.
Under this system, liability limits may not apply if the carrier or their employee intentionally caused the damage or acted recklessly, knowing the risk of damage.
Montreal Additional Protocol No.4 and Montreal Convention
The Montreal Additional Protocol No.4 and the Montreal Convention set liability limits for destruction, loss, damage, or delay of cargo based on SDR/kg.
The Montreal Convention’s liability limits are regularly reviewed, and following the 2024 revision, the baseline for cargo liability limits will be 26 SDR/kg.
Please note that due to the timing of the implementation of the Montreal Protocol No. 4 and various national laws and clauses, outdated figures may remain in practical displays and contract formats. In actual incident handling, it is necessary to check the applicable treaty, the time of the incident, domestic laws of the origin and destination countries, and the AWB clauses.
Also, if the shipper declares a value and pays the required additional freight, the declared value may become the liability limit as long as it does not exceed the actual value. For high-value cargo, it is important to clarify in advance whether to declare the value or handle it through marine cargo insurance.
In practice, decisions are made by comparing the additional freight charged for value declaration with the cargo insurance premium. However, even with a value declaration, issues remain regarding evidence documentation at the time of the incident and exemption grounds, so high-value cargo may use both value declaration and cargo insurance concurrently.
When making a value declaration, it is necessary to confirm that the declared value is appropriately recorded on the AWB. If the declaration field is left blank or the declared amount is lower than the actual value, disputes may arise later concerning the limit of liability during claims.
Comparison of Conventions Related to Air Transportation
| Item | Warsaw Convention / Hague Protocol | Montreal Protocol No. 4 / Montreal Convention | Practical Notes |
|---|---|---|---|
| Definition of Carrier | No clear definition; in practice, mainly determined by the contracting carrier. | The Montreal Convention covers both contracting carriers and actual carriers. | Verify separately the HAWB issuer and the airline on the MAWB. |
| Carrier’s Liability | The carrier may not be liable if it proves having taken all necessary measures or was unable to take them. | Liability applies for destruction, loss, or damage to cargo caused by an accident occurring during air transport. | Differences in liability principles affect claims and defenses. |
| Exemptions | Loss or damage caused by the nature or inherent defects of the cargo is an issue. | Exemptions include inherent defects or nature of the cargo, defective packing by third parties, acts of war or armed conflict, and official measures. | Confirm the cause of the incident, cargo inherent nature, and packing condition. |
| Liability Limits | 250 gold francs/kg, often treated as equivalent to USD 20/kg in practice. | Based on SDR/kg; after 2024 revision, the standard will be 26 SDR/kg for cargo. | Check the time of the incident, applicable treaty, and AWB clause figures. |
| Exclusion of Liability Limits | Certain malicious acts may negate liability limits. | For cargo, liability limits may apply even if the carrier acted intentionally. | The concept of excluding liability limits differs by treaty. |
| Notification of Damage | Under the Warsaw Convention: 7 days for damage, 14 days for delay; Hague Protocol: 14 days for damage, 21 days for delay. | 14 days for damage, 21 days for delay are applicable. | Claims may be disadvantaged if notification periods are exceeded. |
| Limitation Period for Lawsuits | Within 2 years from arrival at destination, the day the aircraft should have arrived, or the day of suspension of carriage. | Within 2 years from arrival at destination, the day the aircraft should have arrived, or the day of suspension of carriage. | Managed separately from damage notifications. |
Differences in Liability Principles
The liability principles for air carriers differ depending on the treaty and are critical in liability matters.
The Warsaw Convention and Hague Protocol are based on a fault liability system. If the carrier proves that it has taken all necessary measures or was unable to take them, there is potential to avoid liability.
On the other hand, under Montreal Protocol No. 4 and the Montreal Convention, if the cargo owner proves that damage, destruction, or loss occurred during air transport, the carrier will be liable unless it establishes exemption grounds.
However, the carrier is not always unconditionally liable. Certain exemption grounds exist, such as inherent defects, quality or faults of the cargo, improper packing by third parties, acts of war, and official measures.
Relationship with Marine Cargo Insurance
Air carrier liability includes notification periods, limitation periods, and liability limits. Therefore, the shipper may not always recover the full amount of damage directly from the carrier. This is where marine cargo insurance plays an important role.
If cargo insurance is in place, the insurer provides compensation to the insured and then seeks subrogation claims against the carrier. In other words, for the cargo owner, it is a crucial arrangement to avoid shouldering the carrier’s liability limits and claim recovery risks alone.
Even when insurers pursue subrogation, lack of documents such as the AWB, arrival records, abnormality records at receipt, photos, inspection records, Survey Report, and copies of damage notifications reduce the possibility of recovery.
In air cargo incidents, it is necessary from the initial stage to simultaneously notify the insurer and preserve evidence.
Scope of Freight Forwarder and Consolidator Involvement
In air cargo, freight forwarders or consolidators often issue the HAWB, while airlines issue the MAWB. In this case, from the cargo owner’s perspective, the freight forwarder or consolidator who issues the HAWB may be held liable as the contracting carrier.
However, since the actual air transport is performed by the airline based on the MAWB, the forwarder or consolidator must, in parallel with handling the cargo owner, check the potential for claims against the airline, warehouse operators, domestic delivery providers, and overseas agents.
| Category | What can be supported | What should not be concluded definitively | Practical handling |
|---|---|---|---|
| AWB Verification | Check HAWB, MAWB, airline name, origin and destination airports, and cargo details | Definitive identification of who ultimately bears legal responsibility | Compare HAWB and MAWB side by side to clarify contracting carrier and actual carrier. |
| Applicable Convention Verification | Check departure and arrival countries, airline’s terms and conditions, and terms on the back of the AWB | Final legal judgment on the application of conventions | Confirm the most current common conventions applicable to both origin and destination countries. |
| Damage Notification | Notify HAWB issuer, airline, warehouse operator, and delivery company | Explanation that notification alone ensures compliance with limitation periods for claims | Manage notification deadlines and filing deadlines separately. |
| Accident Segment Identification | Organize where damage occurred: airport warehouse, during air transport, or during delivery outside the airport | Definitive identification of responsible party before accident segment is clarified | Collect handover records, arrival records, photos, and inspection records. |
| Claims Against Airline | Submit MAWB, Claim Letter, Survey Report, photos, and arrival records | Explanation that full recovery will always be obtained from the airline | Check liability limits, exemptions, notification deadlines, and limitation periods. |
| Insurance Handling | Share documents with cargo insurance company and Freight Forwarder Liability Insurance underwriters | Definitive statement that insurance will always cover the full amount | Check insurance notification, deductibles, coverage limits, and subrogation possibilities. |
Notes on Forwarder and Consolidation Practice
The responsibility limits, governing law, jurisdiction, notification periods, and limitation periods may not fully match between HAWB and MAWB. For example, HAWB may be based on forwarder or consolidation agent terms while MAWB is based on airline terms or air conventions, causing differences in claim deadlines, jurisdiction, and liability limits.
Therefore, it is risky to assume that the obligations to the shipper and recourse against the airline can be handled on the same terms. Upon receiving a claim from the cargo owner, it is necessary to review the terms on both the HAWB and MAWB side by side.
Especially delays in damage notification, failure to conduct surveys, insufficient photos, missing abnormal condition records at arrival, discrepancies between HAWB and MAWB, and the presence or absence of marine cargo insurance directly impact later recovery possibilities.
From right after an incident occurs, it is important to proceed concurrently with cargo owner response, airline response, insurance company response, survey arrangements, and preparation for claims.
Commonly Problematic Cases in Practice
| Case | Points Likely to Cause Issues | Documents to Check | Practical Handling |
|---|---|---|---|
| Claim from Cargo Owner to HAWB Issuer | Freight forwarder or consolidation agent may be held liable as contracting carrier. | HAWB, MAWB, terms on the back of AWB, damage notification | Manage cargo owner response and claims against airline separately. |
| Discrepancies Between HAWB and MAWB | Issues verifying cargo details, weight, number of pieces, carriage conditions, and liability limits | HAWB, MAWB, Invoice, Packing List | Organize differences and confirm which document forms the basis for claims. |
| Delay in Notification After Abnormality at Receipt | Cargo may be presumed delivered in good condition, making claims difficult. | Receipt records, photos, inspection records, Claim Letter | Immediately notify in writing upon discovery and retain receipt records. |
| Damage Occurred During Delivery Outside Airport | Whether the accident happened during air transport or under a separate land transportation contract is an issue. | Delivery slip, HAWB, MAWB, delivery subcontract agreement, arrival records | Confirm whether transport is part of the air carriage contract. |
| No Declaration of Value for High-Value Cargo | Liability limits may be greatly lower than actual loss amount. | AWB, declared value field, Invoice, marine cargo insurance policy | Consider value declaration and marine cargo insurance before transport. |
| Delay or Temperature Deviation for Temperature-Controlled Cargo | Issues with delay notification periods, temperature records, and damage causation | Temperature records, AWB, arrival records, inspection records, survey report | Submit delay notifications and damage documentation as early as possible. |
| Airline Claims Liability Limit | Disputes over applicable conventions, liability limits, and value declaration | AWB, applicable conventions, accident date, SDR conversion data, Invoice | Separate and clarify actual loss amounts and legally recoverable amounts. |
Decision Checklist
| Situation for Confirmation | Party to Confirm With | Items to Confirm | Actions if Issues are Found |
|---|---|---|---|
| Upon receiving the first report of an air cargo incident | Shipper, Consignee, Local Agent, Warehouse Operator | Date and time of discovery, location of discovery, cargo condition, photos, inspection records | Do not admit liability; prioritize fact-finding and evidence preservation. |
| When confirming the applicable convention | Airline, Overseas Agent, Insurance Company, Experts | Origin country, destination country, status of treaty membership, AWB terms and conditions | Verify the latest conventions applicable commonly to both countries. |
| When identifying the carrier | Freight Forwarder, Consolidator, Airline, Shipper | HAWB issuer, MAWB issuer, contracted carrier, actual carrier | Separate and organize the parties to claim against the shipper and to seek recourse from the airline. |
| When confirming the accident segment | Airline, Warehouse Operator, Delivery Company, Surveyor | Whether during air transport, airport warehouse, off-airport delivery, or ancillary transport | Chronologically organize handover records, arrival records, and delivery records. |
| When issuing damage notification | HAWB issuer, Airline, Warehouse Operator, Delivery Company | Damage notification within 7 or 14 days, delay notification within 14 or 21 days, notification recipients, acknowledgment of receipt | Send written hold notification and keep acknowledgment records. |
| When confirming the statute of limitations for litigation | Insurance Company, Lawyer, Airline, Forwarder | Arrival date, estimated arrival date, transport termination date, two-year limitation | Manage lawsuit deadlines separately from notification periods. |
| When confirming liability limitation | Airline, Insurance Company, Legal Department | Applicable convention, liability limits, SDR/kg, presence or absence of declared value | Estimate separately the actual loss amount and legally recoverable amount. |
| When handling insurance claims | Cargo Insurance Company, Insurance Agent, Shipper | Cargo insurance policy, accident notification, Survey Report, subrogation documents | Proceed in parallel with insurance claims and claims against the air carrier. |
Common Misunderstandings
| Misunderstanding | Correct Understanding | Practical Notes |
|---|---|---|
| The Montreal Convention always applies to air cargo incidents | Depending on the treaty membership status of the origin and destination countries, Warsaw-system conventions could also be relevant. | Check the convention commonly applicable in both the origin and destination countries. |
| From the AWB alone, the party to claim against is immediately known | When both HAWB and MAWB exist, the contracted carrier and the actual carrier may differ. | Distinguish between the HAWB issuer and the airline on the MAWB, then confirm accordingly. |
| Air transport conventions do not apply if transport is performed by truck outside the airport | Transport incidental to loading, handover, or transshipment, or unauthorized substitution of transport may still be considered part of air transport. | Confirm whether the transport falls within the air carriage contract. |
| Issuing a damage notification also ensures compliance with the statute of limitations for litigation | Damage notification periods and litigation deadlines are separate. | Manage notification deadlines and the two-year litigation deadline independently. |
| Airlines compensate the full actual loss | Liability limits may mean recovery is less than the actual loss amount. | Check liability limits, declared value, and marine cargo insurance. |
| High-value cargo does not require declared value on the AWB | If no declared value is provided, the usual liability limits may apply. | Consider whether risk transfer should be via declared value or marine cargo insurance. |
| If cargo insurance exists, it is unnecessary to confirm airline liability | In subrogation by insurance companies, AWB, notification periods, liability limits, and accident segments must be checked. | Handle insurance matters and claims against the airline concurrently and in an organized manner. |
Documents to Check
- Air Waybill (AWB)
- House Air Waybill (HAWB)
- Master Air Waybill (MAWB)
- Terms and Conditions on the back of the AWB
- Airline Terms and Conditions
- Forwarder Terms and Conditions
- Consolidator Terms and Conditions
- Booking Records
- Information on Origin and Destination Airports
- Status of Treaty Membership of Origin and Destination Countries
- Cargo Receipt Records
- Arrival Records
- Warehouse Inbound and Outbound Records
- Delivery Slips
- Temperature Records
- Photos
- Inspection Records
- Survey Report
- Claim Letter
- Invoice
- Packing List
- SDS / Dangerous Goods Declaration
- Cargo Insurance Policy
- Freight Forwarder Liability Insurance Policy
Example 1: Case Where a Claim Was Made by the Shipper to the HAWB Issuer
This case involves a forwarder issuing a HAWB to the shipper while the airline performed the actual air transport based on the MAWB. Upon arrival at the destination airport, damage to the cargo’s outer packaging and contents was found, and the shipper sought compensation from the forwarder who issued the HAWB.
In this situation, the forwarder may be required to respond as the contracted carrier in relation to the shipper. On the other hand, the forwarder may consider seeking recourse against the airline based on the MAWB.
If the terms on the HAWB do not match those on the MAWB, there may be differences between the amount the forwarder handles toward the shipper and the amount recoverable from the airline. Starting immediately after the incident, it is necessary to organize the HAWB, MAWB, arrival records, photos, Survey Report, and damage notification records.
Example 2: Case Concerning Whether Damage During Off-Airport Delivery Should be Treated as Occurring During Air Transport
This involved damage occurring while air cargo was being delivered from the arrival airport to a designated warehouse. The shipper sought to claim against the airline considering it an air transport incident, but it became an issue whether the delivery segment was included in the air carriage contract or was a separate domestic delivery contract.
Land transportation outside the airport is generally not considered part of air transportation. However, if it is transportation incidental to loading, delivery, or transshipment, or if it is treated as part of a continuous transport under the air transport contract, it may be presumed to be an accident occurring during air transportation.
In such cases, it is necessary to check the AWB, delivery contract, delivery slip, the scope of arrangements by the airline or freight forwarder, shipper’s consent, and handover records to distinguish between airline carrier liability and domestic delivery responsibility.
Example Case 3: High-value cargo without declared value causing responsibility limitation issues
A high-value precision instrument was transported by air, and damage was discovered upon arrival. Although the actual damage amount was high, the declared value section on the AWB was blank, making it difficult for the shipper to recover beyond the usual liability limits.
In air transport, if the shipper declares the cargo value and pays the necessary additional freight, that declared value may set the limit of liability. Conversely, if no value is declared, the liability limit under the applicable convention (such as SDR/kg) becomes the issue.
For such high-value cargo, it is necessary before transport to consider whether to declare the value or transfer the risk via marine cargo insurance. In actual logistics practice, decisions are made by comparing the additional freight, marine cargo insurance premium, evidence in case of an accident, and liability limitation risk.
Points to Note
When considering airline carrier liability, simply confirming whether damage occurred is insufficient. It is necessary to ascertain which convention applies, who the contracting carrier is, if there is a different actual carrier, and whether the claim relates to the HAWB or MAWB relationship.
Furthermore, it is important to confirm whether the damage occurred during air transportation, whether land transportation outside the airport is included in the air transport contract, if notification and legal action deadlines can be met, the liability limits, and whether there are deficiencies in the declared value or cargo information on the AWB.
Delays in initial response to air cargo incidents can be disadvantageous. Therefore, upon discovering an accident, it is important to immediately check the AWB, arrival records, abnormality records at receipt, photographs, inspection records, survey arrangements, and insurance arrangements.
Summary
To determine the scope of airline carrier liability, it is necessary to check the AWB, contracting carrier, actual carrier, treaty membership status of the origin and destination countries, damage notification period, legal action deadlines, and liability limits.
Although airline carrier liability may seem simpler than ocean carrier liability, in practice the applicable convention, the two-tier structure of HAWB/MAWB, liability limits, and treatment of multimodal transport sections can alter the determination.
Ocean marine cargo insurance plays an important role in supplementing damages that cannot be recovered from the airline carrier and enables early processing of the shipper’s loss upon accident occurrence.
Freight forwarders and consolidators should simultaneously handle shipper coordination, claims against airlines, cooperation with marine cargo insurers, and confirmation of Freight Forwarder Liability Insurance, proceeding with accident response based on liability limits and deadline management.
