The Carriage of Goods by Sea Act of 1936 was meant to be a marked impovement on The Harter Act of 1893. COGSA governs all shipping involving American ports. Its purpose is to protect shippers from liability if cargo is damaged. If stated in the bill of lading, it can also apply to domestic shipping, this has become standard. Unlike Harter, where goods are the responsibility of the shipper from pier to pier, COGSA states that the shipper is responsible only while the cargo is on the ship, being loaded or, being unloaded. Like Harter, COGSA includes a list of immunities if damage results in certain situations. With these immunities comes some responsibility. There are several specific limitations in COGSA to further protect shippers from undue litigation. If the cargo is damaged, the claimant has one year from the stated delivery date on the bill of lading to proceed with litigation. Also, the complaint must be filed no later then three days from the date of delivery of the cargo. The Hague has recognized COGSA and has implimented it as the de-facto international standard.
Unfortunately, the act is to long to copy and annotate here, so I will summarize. There are 17 situations in which the shipper is not responsible for damage to the cargo.
- Errors in navigation.
- Fires caused by non-malicious forces or accidents on the part of the shipper.
- Perils of the Sea.
- An Act of God. This is what freak accidents are attributed to.
- Acts of war.
- An act against the ship by public enemies. This includes terrorism, vandalism, and arson.
- Seizure by customs or legal authorities.
- Quarantine restrictions.
- Act or ommission of the shipper. This is an ambiguous catch-all phrase, still open to interpretation.
- Strikes and lockouts. When stevedores are unable to unload a ship, damage can be caused to many goods, such as fruit, coffee, and frozen goods.
- Riots and looting.
- Rescuing or attempting a rescue at sea.
- Previous damage, inherent defects, and low quality.
- Bad packaging. For instance, when containerization came about, the responsibility for packing containers fell to the manufacturer. If a container full of computers was packed loosely, the computers would slide into each other at sea and break.
- Bad markings. This is why FRAGILE, LIFT HERE, and proper shipping directions are on everything.
- Any defects not discoverable by due diligence.
- Any other damage to the product not caused by the shipper. This is the catch-all phrase.
The above 17 immunities can be enjoyed only if four conditions are met.
- The ship must be seaworthy.
- The ship must be manned and equipped properly.
- The cargo must be stowed properly.
- The spaces in which the cargo is stored must be safe and proper for the cargo. This means that ammunition is not to be stored next to the boilers.
There are several court cases that have further defined and shaped the current implimentation of COGSA.
The US courts established that any litigation involving COGSA would have to be in US courts unless the two parties agreed to another location. In Indussa Corporation vs. The Ranborg, the bill of lading designated Dutch courts as the place for all litigation involving the cargo on that bill. The US court overturned that, saying US courts could not be discluded as a location for COGSA litigation.
In Riverstone Meat Company vs. Lancashire Shipping Company, a shipyard forgot to replace a valve cover. The cargo in one hold ended up soaked in seawater. The fault was deemed to lie with the ship owner for not exercising due diligence in preventing an obvious mistake. This is related to the seaworthiness requirement.
In Mississippi Shipping Company vs. Zander and Company, The DelSud grazed a pier. This happened while the ship was being tugged out. At the time, the crew and captain weren't on deck, as the harbor pilot had responsibility for the boat. The cargo was damaged by leaking seawater. The court said that the shipper was NOT liable, because the voyage had commenced, and it was an error in navigation, not a seaworthiness issue.
I used the venerable resource Marine Cargo Operations, 2nd Ed. by Saurbier and Meurn for the above information
Also, see the United Nations Convention on the Law of the Sea for more info regarding maritime law.