Explanations Forwarders Should Avoid When Handling Accident Response

Explanations Freight Forwarders Should Avoid in Accident Response

The explanations freight forwarders should avoid in accident response refer to practical precautions against providing definitive statements to shippers or other stakeholders before the cause, scope of responsibility, and insurance coverage have been confirmed when a cargo incident occurs.

When damage, wet damage, quantity shortages, contamination, delivery issues, misdelivery, or concealed damage occur with export or import cargo, the shipper demands a prompt response.

However, in the initial stages, the cause of the incident and responsibility relationships often remain unclear. Careless explanations by the freight forwarder at this point may affect later Claim Letters, subrogation claims, reclaims against the carrier, or coverage under the freight forwarder’s or NVOCC’s liability insurance.

The key in accident response is neither to immediately accept nor deny responsibility. The initial focus should be on fact verification, evidence preservation, gathering relevant documents, and notifying the marine cargo insurer or the freight forwarder’s/NVOCC’s liability insurance provider. Any explanations should then be given cautiously and only to the extent that has been confirmed.

Scope Covered in This Article

This article organizes the explanations that freight forwarders and NVOCCs should avoid when handling cargo incidents, along with practical expressions to use instead.

Item	Contents Covered in This Article	Contents Covered in More Detail in Other Articles
Explanation Immediately After an Incident	Approach to providing guidance on points to confirm without determining cause or liability.	Initial incident response, initial cargo accident notifications
Statements Denying Liability	Risks of immediately responding with "We are not liable."	NVOCC liability, House B/L, carrier liability
Determining Others' Liability	How to explain without presumptively assigning responsibility to the shipping line, CFS, warehouse, delivery company, or cargo owner.	Liability with unknown transport segments, survey report and liability assessment
Explanation of Cargo Insurance	Approach to avoiding explanations that compensation is always guaranteed by insurance or that insurance resolves everything.	Marine cargo insurance, insurance claims for cargo
Notification to Liability Insurance	Approach to avoiding admission of liability or promises of payment before notifying freight forwarder or NVOCC liability insurance companies.	Freight forwarder liability insurance, NVOCC liability insurance
Claim Letter	Risks of explaining that Claim Letters or Claim Notices are unnecessary.	Claim letter, time bar, accident notification to carrier
Survey	Risks in immediately deciding that a survey is unnecessary, affecting evidence preservation.	Survey report, inspection attendance, damage investigation
Record Management	Approach to recording explanations to cargo owners, notifications to insurers, and notifications to relevant parties.	Incident response records, subrogation documents, claim handling

What to Avoid Most in Accident Response

The most critical mistake to avoid in handling cargo accidents is drawing conclusions before thoroughly verifying the facts.

In cargo accidents, you cannot determine liability without confirming the cause of the accident, where it occurred, the B/L terms, marine cargo insurance coverage, freight forwarder/NVOCC liability insurance, and the potential for recourse against the carrier, CFS, or others involved.

Therefore, during initial response, it is crucial to adopt the following approach:

• Verify the facts before acknowledging liability.
• Confirm your company’s position before denying responsibility.
• Do not promise payment of insurance claims before verification.
• Do not promise payment before notifying the freight forwarder/NVOCC liability insurance company.
• Do not presume the responsibility of the carrier, CFS, warehouse, delivery company, or shipper without confirmation.
• Do not overlook the importance of Claim Letters or notification deadlines.
• Do not unilaterally decide that surveys or photographic evidence preservation are unnecessary.

Explanations to Avoid and Recommended Alternative Expressions

In accident response, the choice of words can affect future liability relationships and insurance handling.

Explanation to Avoid	Issue	Recommended Alternative Expression
We are not responsible.	This denies responsibility without confirming the position as the House B/L issuer or the scope of our involvement.	First, we will verify our scope of involvement, the B/L terms, and the segment where the accident occurred.
It is the carrier's responsibility.	The cause of the accident has not been confirmed as attributable to the carrier’s segment.	We will review the Master B/L and related documents, including the possibility that it occurred under the carrier’s control.
The cargo insurance will definitely pay.	The freight forwarder is not in a position to guarantee cargo insurance payouts.	Whether the cargo insurance covers this depends on the policy terms and accident documents, and will be determined by the insurer.
Handling it through insurance resolves everything.	This overlooks potential subrogation claims or NVOCC liability.	Even if handled through cargo insurance, it is necessary to confirm the cause of the accident and the liability relationships.
We will compensate immediately.	This could be interpreted as admitting liability.	We will review the damage details and liability relationships before determining the response policy.
We will cover the full amount ourselves.	This may amount to a payment commitment before notifying the freight forwarder/NVOCC liability insurance provider.	We will first notify our freight forwarder/NVOCC liability insurer and review the necessary documents.
Poor packaging.	This immediately assigns responsibility to the shipper, potentially damaging relations and provoking objections.	It is necessary to assess the packaging condition, loading status, and transportation conditions before making a judgment.
We cannot respond because it has been received.	This ignores latent damage and damage discovered after unpacking.	We will confirm the condition at receipt, the time of discovery, photos, and details in the delivery receipt.
Claim Letters are unnecessary.	This neglects notification deadlines and preservation of rights.	To preserve rights, please submit a Claim Letter or Claim Notice as needed.
Surveys are unnecessary.	This risks losing opportunities for evidence preservation and damage assessment.	Depending on the damage situation, surveys may be required; we will confirm this with the cargo insurer or loss adjuster.

Guidelines for Explaining to the Shipper at Each Stage

In accident response, the information that can be communicated to the shipper changes depending on the stage.

Stage	Information That Can Be Shared	What to Avoid Saying	Required Actions
Immediately After Receiving Accident Report	Confirm the accident details and inform them of necessary documents.	Making definitive statements about liability, insurance payment, or compensation amount.	Verify photos, B/L, receipts, and the date/time the accident was discovered.
While Collecting Documents	Inform that related documents are being reviewed.	Assigning responsibility to the shipping line, CFS, shipper, or delivery company without basis.	Organize House B/L, Master B/L, EIR, and CFS records.
During Survey/Investigation	Inform that the cause of the accident and damage extent are under investigation.	Making responsibility determinations before survey results are available.	Check the survey report, photos, and packaging condition.
After Notifying Marine Cargo Insurance Company	Confirm that the shipper’s marine cargo insurance company has been or will be notified.	Definitively stating that insurance will definitely pay or refusing liability because the loss is allegedly not covered.	Confirm instructions from the insurance company, required documents, and need for survey.
After Notifying Freight Forwarder/NVOCC Liability Insurance Company	Inform that your company’s liability insurance provider has been notified and the response policy is being confirmed.	Admitting liability or promising payment before confirmation from the insurance company.	Confirm directions from the insurance company, responsibility relationships, subrogation parties, and necessary documents.
After Liability Has Been Determined	Explain the response policy based on confirmed facts.	Conveying conclusions without showing confirmation documents.	Organize the scope of liability, parties for claim recovery, and insurance handling.
Negotiation/Settlement Stage	Explain payment terms, claims, and insurance handling clearly.	Making payment promises or exemption agreements solely verbally.	Confirm agreement details in writing.

In accident response, there is no need to provide a final answer from the start. It is important to clearly separate confirmed facts at each stage from items still to be verified and explain accordingly.

Common Misunderstandings

In cargo claim handling, many problems arise not only from what is said to the shipper, but also from internal misunderstandings held by the freight forwarder or NVOCC. These misunderstandings should be corrected before communicating externally.

Misunderstanding	Correct Understanding	Practical Notes
Notifying an insurer or related party means admitting liability.	Notification is for fact confirmation, evidence preservation, and rights protection. It is not the same as accepting liability.	Notify the marine cargo insurer, liability insurer, carrier, CFS, warehouse, or delivery company early while clearly reserving liability.
If marine cargo insurance handles the claim, subrogation risk disappears.	Even after marine cargo insurance pays the cargo owner, the insurer may pursue subrogation against NVOCCs, freight forwarders, carriers, warehouses, or delivery companies.	Preserve B/Ls, delivery records, photos, survey reports, and correspondence even when the cargo owner uses marine cargo insurance.
If the receipt shows no remarks, concealed damage cannot be claimed.	A clean receipt is important evidence, but it does not automatically eliminate the possibility of concealed damage discovered after unpacking.	Confirm the unpacking date, discovery timing, photos, packaging condition, and whether notification was made promptly after discovery.
A verbal settlement is enough if both parties agree.	Verbal agreement may later cause disputes over payment scope, admission of liability, waiver, or recovery rights.	Confirm settlement terms, payment scope, reservation of rights, and involvement of insurers in writing.
A Claim Letter is only necessary when the final claim amount is known.	A Claim Letter or Claim Notice may be used to notify the incident and preserve rights even before the final claim amount is fixed.	Check B/L terms, carriage conditions, notification deadlines, and insurer instructions before deciding whether to submit one.
A survey is only needed for large claims.	Survey necessity depends not only on the claim amount but also on the type of damage, cargo condition, evidence availability, and insurance requirements.	Before repairing, disposing of, repacking, or moving the cargo, confirm survey necessity with the cargo insurer or claims agent.
Forwarder liability insurance works the same way as marine cargo insurance.	Marine cargo insurance protects the cargo owner’s interest in the cargo, while freight forwarder/NVOCC liability insurance responds to liability risks of the forwarder or NVOCC.	Do not confuse the cargo owner’s insurance claim with the forwarder’s liability defense and insurer notification requirements.
Once the carrier is likely responsible, the forwarder no longer needs to manage the claim.	Even if the carrier may ultimately be responsible, the freight forwarder may need to preserve documents, notify parties, and coordinate with the shipper, insurer, and carrier.	Review House B/L, Master B/L, claim notices, survey findings, and correspondence before reducing involvement.

Common Problematic Cases in Practice

Case	Common Issues	Documents / Parties to Confirm	Recommended Practice
Responding immediately after the incident with "This is not our responsibility"	This may appear as denying responsibility without verifying your status as House B/L issuer or NVOCC.	House B/L, Master B/L, carriage contracts, segment of incident occurrence	Before deciding responsibility, confirm your scope of involvement and contractual position.
Immediately blaming the shipping line	Before confirming the incident segment or cause, there may be errors in claims approach towards involved parties.	Master B/L, EIR, CFS records, photos, container condition	Check the possibility including between shipping lines and notify parties as necessary.
Explaining that insurance will definitely pay	Preempting the insurer’s decision can mislead the cargo owner.	Marine cargo insurance policy, coverage terms, incident documents, damage photos	Notify the cargo insurer of the incident and confirm required documents and survey necessity.
Promise full payment before notifying the freight forwarder/NVOCC liability insurance company	This may interfere with insurance handling, liability defense, and recovery claims.	Accident report, insurance contract, correspondence with cargo owner, presence or absence of payment promise	Notify the liability insurance company before admitting responsibility or promising payment.
Indicating that a Claim Letter is unnecessary	This risks losing the notification deadline to the carrier and opportunities to preserve subrogation rights.	B/L terms, carriage contracts, accident notification deadlines, cargo owner instructions	Advise submission of a Claim Letter or Claim Notice promptly if required.
Deciding survey is unnecessary without consultation	This may result in insufficient evidence about cause, extent of damage, packaging, and incident segment.	Cargo photos, packaging condition, cargo insurer, claims agent, surveyor	Confirm with the cargo insurer or claims agent based on damage extent and condition.
Dismissing response because the cargo was already received	This might overlook concealed damage or damage discovered after unpacking.	Receipt, Delivery Note, unpacking photos, discovery date/time, cargo condition	Separate verification of records at receipt and at the time of damage discovery.
Conveying settlement terms orally only	May cause disputes later about payment promises, liability acceptance, or exemption agreements.	Email records, meeting notes, insurer instructions, agreement documents	Always confirm important explanations or agreements in writing.

Scope of Freight Forwarder Involvement

A freight forwarder can support accident reception, data collection, inquiries to relevant parties, notifications to marine cargo insurance companies and freight forwarder/NVOCC liability insurers, guidance on Claim Letters, and confirmation of the need for surveys. However, they should not finalize the cause of the accident, allocation of responsibility, insurance payment, or liability before reviewing the materials.

Category	Support Typically Provided	What Should Not Be Determined	Practical Handling
Accident Reception	Confirm accident details, discovery date/time, cargo condition, and photos	Decide liability or payment eligibility at the time of reception	First, guide the necessary documents and the next steps.
Liability Confirmation	Organize House B/L, Master B/L, accident segment, and involved parties	Immediately determine liability of own company, shipping line, CFS, or cargo owner	Separate contract relationships and accident segments for verification.
Marine Cargo Insurance Handling	Guide on accident notification to the marine cargo insurance company and document requirements	Explain that payment is guaranteed under marine cargo insurance	Explain that payment eligibility is subject to the marine cargo insurance company’s assessment.
Liability Insurance Handling	Notify own freight forwarder/NVOCC liability insurance company of the accident	Approve liability or promise payment before insurer confirmation	Notify the insurer before liability decisions and confirm response policy.
Claim Letter Guidance	Encourage notification of the carrier and relevant parties for accident reporting and rights protection	Decide that a Claim Letter is unnecessary	Check notification deadlines and contract terms, and guide formal written notification if necessary.
Survey Confirmation	Confirm survey necessity depending on damage condition	Unilaterally decide a survey is not needed	Confirm with the marine cargo insurance company, loss adjusters, and surveyors.
Notification to Involved Parties	Notify shipping lines, CFS, warehouses, delivery companies, co-loaders, and overseas agents	Explain as if accident cause or liability has been fixed before notification	Organize notifications for fact confirmation and rights protection.
Resolution Negotiation	Organize payment conditions and reimbursement policies based on verified documents	Make payment promises or exemption agreements verbally only	Confirm agreed contents in writing.

Freight Forwarder Decision Checklist

Situation	Contact Party	Items to Check	Action if Issues Arise
Immediately After Receiving Accident Notification	Shipper, Consignee, Sales Contact, Accident Response Team	Accident details, discovery date/time, cargo condition, photos, receipt	Provide guidance on required documents and initial response, avoid making liability judgments.
When Confirming B/L	Shipper, Customs Officer, Shipping Line, NVOCC, Co-Loader	House B/L, Master B/L, transport terms, liability segments	Confirm your company’s contractual position before providing explanations.
When Confirming Accident Segments	Shipping Line, CFS, Warehouse, Delivery Company, Overseas Agent	In-gate records, gate-out records, EIR, Delivery Note, photos	Do not determine accident cause; gather records from each segment.
When Checking Marine Cargo Insurance	Shipper, Marine Cargo Insurer, Claims Agent, Surveyor	Insurance coverage status, policy terms, accident notice, survey necessity	The freight forwarder should avoid making definitive judgments on insurance payment.
When Reviewing Own Liability Risk	Internal Responsible Staff, Freight Forwarder/NVOCC Liability Insurer, Agent	Liability acknowledgment, payment promises, insurance notifications, required documents	Notify the liability insurer before accepting responsibility.
When Confirming Claim Letter	Shipper, Shipping Line, Airline, CFS, Warehouse, Delivery Company	Notification deadlines, recipient address, accident details, claim preservation	Avoid outright denial; guide on written notification as necessary.
When Confirming Survey	Marine Cargo Insurer, Claims Agent, Surveyor, Shipper	Damage amount, damage condition, storage location, need for attendance, photos	Ensure evidence preservation before disposal or repair of cargo.
Before Responding to Shipper	Internal Responsible Staff, Accident Response Team, Insurer, Related Parties	Response text, liability acknowledgment wording, payment commitment wording, definitive insurance payment wording	Avoid definitive language; clearly state items under review.
During Settlement Negotiations	Shipper, Insurance Company, Related Parties, Internal Responsible Staff	Payment terms, subrogation target, waiver agreements, written agreements	Do not conclude with verbal agreements; confirm settlements in writing.

Do Not Declare "We Are Not Responsible"

Freight forwarders should avoid immediately declaring "We are not responsible" right after an incident occurs.

Especially when issuing a House B/L, the NVOCC or freight forwarder may be regarded as a contractual party with the shipper.

Even if the actual cause of the incident lies with the carrier, CFS, warehouse, delivery company, or packaging by the shipper, it is essential first to review your own position and relevant documentation.

Instead, explain as follows:

"At this point, responsibility cannot be determined. We will verify the scope of our involvement, the B/L terms, the timing of incident discovery, and related documents."

Do Not Assume "It Is the Carrier's Responsibility"

Even if the cargo was damaged during maritime transportation, it should not be immediately assumed that the carrier is responsible.

The cause of the incident may relate to inadequate packing at export, improper stowage during container loading, handling at the CFS, incidents during port storage, damage during inland delivery, or the inherent nature of the cargo.

Whether the carrier is liable should be determined by reviewing the Master B/L, House B/L, survey report, in-gate and gate-out records, photographs, container exterior condition, seal status, and other relevant evidence.

Instead, explain as follows:

“We will investigate, including the possibility that the incident occurred under the carrier’s control. After confirming the Master B/L, container condition, seal status, and in-gate and gate-out records, we will notify the carrier as necessary.”

Do Not Explain “Payment Will Always Be Made by Cargo Insurance”

Even if the cargo owner has marine cargo insurance, freight forwarders should avoid stating, “Payment will definitely be made by insurance.”

Whether cargo insurance pays out depends on the insurance terms, cause of the incident, nature of the damage, timing of notification, required documentation, exclusions, and other factors.

Freight forwarders are not in a position to guarantee insurance claim payments.

Instead, use an explanation such as the following:

“Whether this is covered by marine cargo insurance will be determined by the insurer based on the policy terms and incident documents. Please first notify the insurance company of the incident and confirm the required documents.”

Do Not Explain That "Everything Is Settled by Insurance"

Even if the marine cargo insurance pays out a claim, this does not necessarily mean that all accident-related matters are resolved.

After the cargo insurer pays the shipper, they may seek subrogation claims against the NVOCC, freight forwarder, carrier, warehouse operator, or delivery company involved.

Therefore, even when insurance coverage is expected, the freight forwarder should organize all relevant documentation and prepare for potential liability risks.

Instead, explain the situation as follows:

“Even if the matter is handled through marine cargo insurance, it is still necessary to verify the cause of the incident and determine responsibility. Our company will also organize the relevant materials and notify the concerned parties as needed.”

Avoid Saying "We Will Compensate Immediately"

In prioritizing the relationship with the shipper, it is risky to say "We will compensate immediately" or "We will bear the cost" before confirming the cause of the incident.

Such statements may be regarded as an admission of liability.

Additionally, if you intend to use your freight forwarder/NVOCC liability insurance, making unilateral payment promises before notifying the insurance company could interfere with the insurance process.

Instead, use an explanation like the following:

"After confirming the details of the damage and the responsibility, we will organize our response plan. First, we will review the incident documentation and notify our freight forwarder/NVOCC liability insurance company."

Avoid Saying, "We Will Cover the Full Amount"

At the initial stage of accident response, saying "We will cover the full amount" could be interpreted as acknowledging liability or making a payment commitment.

In cargo incidents, it is necessary to verify the amount of damage, scope of liability, limitation of liability, exemption clauses, subrogation targets, the relationship with marine cargo insurance, and the applicability of freight forwarder/NVOCC liability insurance.

Especially when there is a possibility of utilizing freight forwarder/NVOCC liability insurance, making a payment promise before confirming or obtaining consent from the insurance company may hinder insurance claims handling, liability defense, and subrogation recovery.

Instead, explain as follows:

"We will review the damage details, liability relationships, and whether insurance coverage applies before determining the course of action. We will also notify our freight forwarder/NVOCC liability insurance company and review the necessary documentation."

Issues with Admitting Liability Before Notifying the Insurance Company

When there is a possibility of using freight forwarder or NVOCC liability insurance, it is important to avoid making statements that admit liability or promises of payment before notifying the insurance company.

Insurance contracts often require prompt notification to the insurer after an incident occurs and prohibit settlement negotiations, promises of payment, or admission of liability without the insurer’s consent.

If a freight forwarder or NVOCC responds before notifying the liability insurance company with statements such as "We will cover the cost," "We will pay the full amount," or "We will handle this as our responsibility," the following problems may arise:

• The insurance company may be unable to fully investigate the cause of the incident.
• The company may be seen as having admitted liability that could otherwise have been contested.
• Promises of payment made without the insurer’s consent may cause issues.
• Handling of litigation costs and defense expenses becomes complicated.
• Recovery claims against shipping lines, CFS, warehouses, or delivery companies may be hindered.
• There is a risk that the insurer may deem the claim partially or fully outside the coverage scope.

Notifying the insurer of an incident does not mean admitting liability. It is crucial to promptly notify the freight forwarder or NVOCC liability insurance company and confirm the response plan before any liability determination.

Avoid Immediately Concluding "Packaging Defect"

Even if there appears to be a problem with the cargo's outer packaging or packing, it is best to avoid immediately concluding that it is a "packaging defect on the shipper's side."

Judgment should be made after confirming the packing condition, nature of the cargo, transportation conditions, handling marks, stowage situation, timing of accident discovery, and the condition of external damage.

Even if the shipper’s responsibility is suspected, it is safer to limit the initial response to fact-finding.

Instead, explain as follows:

"Packaging condition is one of the items to be checked; however, at this point, the cause cannot be determined. We will verify the cargo condition, outer packaging, stowage, and handling during transport."

Do Not Dismiss Claims by Saying "We Cannot Respond Because It Has Already Been Received"

Even after cargo has been received, depending on when damage is discovered and the nature of the incident, it may be necessary to confirm carrier liability or file an insurance claim.

Issues such as damage to interior cargo, concealed damage, quantity shortages, or damage identified after unpacking can still arise, even if the receipt states no abnormalities were found.

For this reason, it is best to avoid ending correspondence solely on the basis that the cargo has already been received.

Instead, explain as follows:

"Records at the time of receipt are important for verification. We will review the receipt, photos taken at unpacking, the timing of damage discovery, and cargo condition before determining the appropriate response."

Do Not Say, "A Claim Letter Is Not Needed"

In the event of cargo incidents, submitting an accident notification or Claim Letter to carriers, shipping lines, airlines, CFS, warehouse companies, distribution firms, and others may be important for preserving rights.

Claim Letters or Claim Notices are not documents used solely to immediately finalize the amount of damage. They serve to notify relevant parties of the incident and to preserve potential future claims or subrogation rights.

If a freight forwarder responds with “A Claim Letter is not needed” outright, the shipper or insurer may lose the opportunity to notify the carrier, which could be disadvantageous due to Time Bar rules or notification deadlines.

Particularly for air cargo, ocean cargo, inland delivery, and warehouse storage, notification deadlines and claim periods vary according to applicable terms and conditions or carriage contracts. Therefore, rather than outright dismissing the need, it is important to confirm who the Claim Letter should be submitted to, the deadlines, and the required contents.

Instead, explain as follows:

“To preserve rights, please submit a Claim Letter or Claim Notice to the carrier or relevant parties as necessary. We will review and clarify the submission destination, deadline, and content based on the B/L terms, carriage contracts, and instructions from the cargo insurance company.”

Do Not Say “A Survey Is Not Necessary”

In cargo incidents, surveys can be crucial to verify the cause of damage, extent of loss, damage amount, cargo condition, packaging condition, and the segment where the accident occurred.

A survey is not conducted solely for the purpose of filing an insurance claim. It also serves as evidence for the cargo owner, marine cargo insurer, freight forwarder, NVOCC, shipping line, warehouse operator, and delivery company to confirm accident details and determine liability and subrogation actions.

If the freight forwarder states immediately after the accident that “a survey is not necessary,” the condition of the damaged cargo may change, preventing an objective assessment of the cause and extent of damage. Before repairing, disposing, sorting, repacking, or reshipping cargo, it is important to preserve photos, videos, outer packaging, packing materials, receipt documents, and storage status.

There may be cases where the damage amount is minor or the marine cargo insurer decides to waive the survey. However, such a decision should not be made unilaterally by the freight forwarder, but should be based on confirmation with the marine cargo insurer, claims agent, surveyor, and cargo owner.

Instead, explain as follows:

“Depending on the damage situation, a survey may be necessary. Please notify the marine cargo insurer or claims agent of the incident and confirm the need for a survey, photo preservation, and cargo storage method.”

Information to Communicate in Initial Response

What the freight forwarder should communicate in the initial response is not a conclusion on liability, but the matters that need to be confirmed.

The following points should be provided during the initial response:

• Confirm the details of the incident.
• Request preservation of photos and videos.
• Record the condition before moving, disposing of, or repairing the cargo.
• Verify the B/L number, container number, and seal number.
• Check the entries on the receipt, EIR, and Delivery Note.
• Notify the marine cargo insurance company about the incident.
• Determine whether a survey is necessary.
• If needed, have a Claim Letter or Claim Notice submitted.
• Notify your company’s freight forwarder or NVOCC liability insurance provider as well.
• Inform related parties such as the ocean carrier, CFS, warehouse, and delivery company.

In the initial response, it is crucial to clearly communicate to the cargo owner the "documents required for verification" and the "next steps going forward."

Practical Examples of Initial Responses

Immediately after receiving accident notification, the following expressions are practical and easy to use in actual operations.

"Thank you for your report. First, we will verify the accident details and cargo condition. Kindly provide photos of the damaged areas, the external packaging condition, delivery receipts, B/L number, container number, and the date and time when the damage was discovered. We will review relevant documents to clarify liability."

"At this stage, since the cause of the accident cannot be determined, we will confirm the House B/L, Master B/L, in-gate and gate-out records, and whether a survey is needed. We will notify concerned parties as necessary."

"If you have marine cargo insurance coverage, please notify your cargo insurance company about the incident promptly. Even if the matter is handled under cargo insurance, separate confirmation of liability and recovery actions may be required."

"Including the possibility that our company’s liability could be involved, we will also notify the freight forwarder/NVOCC liability insurance company to confirm the response policy. At this point, liability and payment feasibility are still under review."

Internal and Insurance Company Notification

Upon receiving accident notification, the freight forwarder must promptly inform the responsible internal personnel, the accident response team, and their freight forwarder/NVOCC liability insurance company or insurance agent.

Even when responding quickly to the cargo owner, it is important to confirm the response strategy with the freight forwarder/NVOCC liability insurance company and relevant parties before admitting liability or making any payment commitments.

Additionally, if the cause of the accident may lie with the carrier, CFS, warehouse, delivery company, co-loader, or overseas agent, the forwarder must notify each relevant party and conduct Claim Letter issuance and evidence preservation.

Importance of Keeping Records

When handling incidents, it is essential to keep a record of the explanations provided to the shipper.

Even if the explanation was given verbally, organizing and confirming the details later via email can help prevent misunderstandings.

In particular, the following items should be documented:

• Date and time the incident notification was received.
• Who provided the notification.
• What was explained to the shipper.
• That no admission of liability was made.
• Requests for additional documentation.
• Date and time notification was given to the marine cargo insurance company.
• Date and time notification was given to the freight forwarder / NVOCC liability insurance company.
• Date and time notification was given to the shipping company or CFS.
• Whether survey arrangements were made.
• Status of submission of Claim Letter or Claim Notice.
• Any upcoming points to be confirmed.

To avoid disputes over “said or not said,” it is important to keep written records of explanations and items to be confirmed during incident handling.

Example 1: Case of Denying Responsibility Immediately After the Incident

There are cases where, immediately after discovering water damage to imported cargo, the person in charge responds to the shipper with, "Our company is not responsible."

However, if your company has issued the House B/L or is involved in arranging delivery, CFS services, or Co-Loader coordination, it is risky to deny responsibility without first confirming your position and scope of liability.

In this case, you should first review the House B/L, Master B/L, the timing of the damage discovery, cargo condition, and gate-in/out records, and explain that "The responsibility is currently under review."

Specific Example 2: Case of Losing the Opportunity to Notify by Advising That a Claim Letter Is Unnecessary

There are cases where a freight forwarder immediately responds "It is not necessary" when the shipper asks, "Do we need to submit a Claim Letter to the carrier?"

Later, when the cargo insurance company considers subrogation, it may be disadvantaged due to delayed accident notification to the carrier, affecting the notification deadline and Time Bar.

In such cases, the freight forwarder should not unilaterally decide on the necessity of a Claim Letter but should check the B/L terms, carrier’s transport conditions, the timing of accident discovery, and instructions from the cargo insurance company, then promptly guide the shipper to issue written notification if necessary.

Example 3: Case Where a Survey Was Deemed Unnecessary and Evidence Became Insufficient

There are cases where external damage to cargo packaging is found, but the person in charge responds with “Photos alone are sufficient; a survey is not needed,” resulting in the cargo being repaired or repackaged.

Later, during insurance claims or liability assessment, there can be obstacles in confirming the cause of the incident, the extent of damage, packaging condition, and handling during transport objectively, which may hinder recovery claims or insurance processing.

In such cases, a notification to the marine cargo insurer or claims adjuster should have been made to confirm whether a survey was necessary, ensure appropriate photography, verify cargo storage methods, and preserve packaging materials before proceeding with handling.

Specific Example 4: Case of Verbally Promising Full Payment

In order to avoid damaging the relationship with the cargo owner, there are cases where a representative verbally promises, before confirming the cause of the incident, “We will cover the full amount this time.”

Later, when notifying the freight forwarder/NVOCC liability insurance company, the lack of confirmation regarding the cause and scope of responsibility, combined with the promise of payment made without the insurer’s consent, can become an issue.

In such cases, the response should be to refrain from admitting liability or promising payment, and instead state: “We will confirm the details of the damage and the responsibility involved, then notify our freight forwarder/NVOCC liability insurance company to coordinate our course of action.”

Example 5: A Case Where the Freight Forwarder Concluded with Marine Cargo Insurance Without Preparing for Subrogation Claims

Because the cargo owner had purchased marine cargo insurance, the freight forwarder explained, "The insurance will cover everything," and neglected to organize their own documentation or notify the relevant parties.

However, after the cargo insurance company pays the insurance claim to the cargo owner, there is a possibility of subrogation claims being made against the NVOCC, freight forwarder, carrier, warehouse operator, or delivery company.

In such cases, handling the marine cargo insurance claim and managing the company’s own liability risk should be considered separately, with preservation of incident documents, photos, B/Ls, records of CY in-gate and gate-out, and notifications to related parties.

Example 6: Overlooking Concealed Damage Due to "Received" Status

There are cases where no exterior damage is noted at the time of cargo receipt, but damage to the internal cargo is discovered after unpacking.

If the person in charge dismisses the issue by stating "the cargo has already been received, so nothing can be done," this may result in losing the opportunity to address concealed damage, document photos taken at unpacking, review receipt records, confirm the timing of damage discovery, and verify marine cargo insurance coverage.

In such cases, it is necessary to review the receipt documents, photos taken during unpacking, the damage discovery date and time, packaging condition, and cargo storage status, and determine whether notification to the marine cargo insurer and other relevant parties is needed.

Practical Considerations

What freight forwarders should avoid when handling cargo incidents is making statements that admit or deny liability, or definitively determine the payment of marine cargo insurance claims before the cause of the incident and scope of responsibility are confirmed.

In the initial response, it is essential to prioritize fact-finding, securing evidence, gathering relevant documents, notifying the marine cargo insurance company, and notifying the freight forwarder/NVOCC liability insurance company.

Since NVOCC liability, House B/L liability, marine cargo insurance, Claim Letters, and subrogation claims are interconnected, it is important to handle these matters cautiously without making definitive statements and to keep detailed records throughout the process.

Practical Points to Confirm

Before explaining to the shipper about an accident, the freight forwarder should at least confirm the following points.

• Whether the company issued the House B/L.
• The scope of the company’s responsibility.
• When and where the accident was discovered.
• Whether there are photos showing the cargo condition.
• Whether remarks are noted on receipts, EIRs, or Delivery Notes.
• Whether the container and seal numbers can be confirmed.
• Whether notification to the shipping line on the Master B/L is required.
• Whether notification to the CFS, warehouse, delivery company, or co-loader is required.
• Whether the shipper has marine cargo insurance coverage.
• Whether notification has been made to the cargo insurance company or loss adjuster.
• Whether notification has been made to the company’s freight forwarder/NVOCC liability insurance company.
• Whether the explanation avoids expressions that imply acceptance of liability.
• Whether the explanation avoids promises of cargo insurance compensation payment.
• Whether the need for a Claim Letter or Claim Notice has been confirmed.
• Whether the necessity of a survey has been confirmed with the cargo insurance company or loss adjuster.
• Whether the shipper has been informed about documents that will be required going forward.
• Whether records have been kept of the explanation given to the shipper.

Summary

The explanations that freight forwarders should avoid during accident response are definitive statements made to the shipper or related parties before the cause of the accident, scope of liability, and insurance coverage have been confirmed.

In particular, statements such as “We bear no responsibility,” “The carrier is liable,” “The marine cargo insurance will definitely cover this,” “Handling it through insurance will resolve everything,” “We will compensate immediately,” “We will cover the full amount,” “A Claim Letter is not necessary,” and “A survey is not required” may affect subsequent Claim Letters, subrogation, insurance recovery, and re-claims.

What is important in accident response is not only avoiding prohibited expressions but also understanding what needs to be confirmed and how to communicate effectively instead.

In the initial response, rather than concluding responsibility, it is essential to organize information such as the accident details, discovery timing, cargo condition, B/L number, container number, receipts, photos, the necessity of a survey, notification to the marine cargo insurance company, notification to the freight forwarder/NVOCC liability insurance company, and whether a Claim Letter is required.

Freight forwarders should respond sincerely to the shipper while, before admitting liability, confirming their own position, the B/L terms, accident segment, insurance coverage, and potential for recourse against involved parties.