Question 1

COGSA governs the liability of ocean carriers for damage to goods while the goods are held in storage warehouses at the seaport.

Accepted Answer

COGSA only governs the liability of ocean carriers for damage to goods during ocean transportation, not while the goods are held in storage warehouses at the seaport. Storage of goods at the seaport is usually governed by separate agreements or contracts.

Question 2

Where the shipper fails  to declare the value of the shipment on a clean bill of lading and the carrier has knowledge of the true value and does not advise the shipper to declare the value so, in the U.S. the carrier's liability will be unlimited liability per package.

Accepted Answer

In the U.S., under the Carriage of Goods by Sea Act (COGSA), the carrier's liability is limited to $500 per package unless the shipper declares a higher value and pays a higher freight rate based on that declared value. The carrier's knowledge of the true value does not automatically lead to unlimited liability.

Question 3

Today, COGSA allows ocean carriers to put clauses in their bills of lading exonerating them from liability.

Accepted Answer

COGSA (Carriage of Goods by Sea Act) limits the circumstances under which carriers can be exonerated from liability, and does not allow carriers to include clauses in their bills of lading that completely exonerate them from liability for loss or damage to goods.

Question 4

In the United States, ocean carriers are not liable under the Uniform Commercial Code in amounts in excess of $500 per shipment.

Accepted Answer

While the Uniform Commercial Code does have a $500 limit on liability for certain types of goods, ocean carriers are actually subject to the Carriage of Goods by Sea Act (COGSA), which provides for a different liability limit based on the weight of the cargo.

Question 5

Goods can be stored at any location on the vessel and the decision is left to the discretion of the captain.

Accepted Answer

Goods must be stored in accordance with regulations, industry standards, and proper stowage principles to ensure the safety of the vessel, crew, and cargo. The captain must follow these guidelines and cannot use discretion to store goods at any location on the vessel.

Question 6

A provision in a bill of lading that extends the protection of the Hague Rules to stevedores is known as a Himalaya Clause.

Accepted Answer

A Himalaya Clause is a provision in a bill of lading that extends the protection of the Hague Rules to third parties such as stevedores, agents, or independent contractors. This clause is named after the case where it was first recognized, The Himalaya, and has been widely adopted in shipping contracts.

Question 7

Ocean carriers are liable if cargo is damaged as a result of the ship being taken over by pirates, if the seizure or damage was foreseeable and the carrier failed to take necessary preventive measures.

Accepted Answer

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Question 8

Ocean carriers are liable if cargo is damaged as a result of errors in the navigation of the ship.

Accepted Answer

Under the Hague-Visby Rules, carriers are generally exempt from liability for loss or damage arising from the navigation or management of the ship, as these are considered errors in navigation or in the management of the ship by the crew.

Question 9

COGSA relieves carriers of liability for negligent care and handling of cargo.

Accepted Answer

COGSA does not relieve carriers of liability for negligent care and handling of cargo. Carriers are required to exercise due diligence in handling and stowing cargo to ensure its safety during transport.

Question 10

If goods are sacrificed in the process of saving a ship from a substantial common danger, the owners of the goods are said to have incurred a particular average loss.

Accepted Answer

The owners of the goods have incurred a general average loss, not a particular average loss, because the sacrifice of the goods was made for the common safety of all property involved in the maritime adventure.

Question 11

Ocean carriers are liable if cargo is damaged because it was left exposed to rain during the journey.

Accepted Answer

Ocean carriers have a responsibility to take reasonable care of the cargo during transport. If the cargo is damaged because it was left exposed to rain, the carrier can be held liable for the damage.

Question 12

If A's ocean cargo is thrown overboard in order to save a sinking ship and B's cargo is saved as a result, B must contribute to A for the loss.

Accepted Answer

According to the principle of General Average in maritime law, when there is intentional sacrifice or expenditure to safeguard the common maritime adventure, such as throwing cargo overboard to save the ship, the losses are shared proportionally by all the parties involved in the adventure, including cargo owners. Therefore, B must contribute to A for the loss of A's cargo that was sacrificed for the common good.

Question 13

A clean bill of lading establishes a rebuttable presumption that the goods delivered to an ocean carrier were in good condition.

Accepted Answer

A clean bill of lading means that the goods were received by the ocean carrier in apparent good condition and therefore creates a presumption that they were in good condition at the time of shipment. However, this presumption can be rebutted by evidence to the contrary.

Question 14

Carriers are liable for damages equal to the value of the goods regardless of how their value is stated on the bill of lading.

Accepted Answer

Carriers' liability for damages is often limited to the value of the goods as stated on the bill of lading, unless a higher value is declared and additional charges are paid.

Question 15

A consignee can prove a shortage by showing that the quantity of the cargo unloaded at the destination is less than that listed on the bill of lading.

Accepted Answer

This is true. A consignee can prove a shortage by comparing the quantity of cargo unloaded at the destination with the quantity listed on the bill of lading. If the quantity unloaded is less than the quantity listed, it is considered a shortage.

Question 16

Clean bill of lading is a carrier's guarantee, or warranty, of the condition of the goods it has delivered.

Accepted Answer

A clean bill of lading indicates that the goods have been delivered in good condition and the carrier is guaranteeing their condition.

Question 17

The Himalaya Clause governs the liability captains of carriers for damage to goods being transported from one U.S. seaport to another U.S. seaport.

Accepted Answer

The Himalaya Clause governs the liability of carriers towards third parties, such as cargo owners or their insurers, and not captains. It also applies to international carriage, not just carriage between U.S. seaports.

Question 18

An ocean carrier is liable for its failure to use due diligence in providing a seaworthy ship at the beginning of the voyage.

Accepted Answer

According to the legal concept of seaworthiness, an ocean carrier is responsible for providing a ship that is fit for the intended voyage at the beginning of the journey. If the vessel is not seaworthy and this leads to damage or loss of cargo, the carrier can be held liable for its failure to exercise due diligence in ensuring that the ship was safe and ready for the voyage. This principle is recognized in international maritime law and is reflected in various national and international regulations and conventions.

Question 19

Pilferage of goods in transit has been greatly reduced by the advent of break-bulk freight.

Accepted Answer

Break-bulk freight involves handling individual goods or packages, which can actually increase the opportunities for pilferage compared to containerized shipping, where goods are sealed in large containers reducing access to individual items.

Question 20

A policy that is "free of particular average" is one that will not cover any partial and average losses.

Accepted Answer

A policy that is "free of particular average" only covers losses that are total or substantial, it does not cover partial or minor losses.

Quiz 6: Legal Issues in International Transportation