Agent versus Forwarder - Implication on Liabilities
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1 Agent versus Forwarder - Implication on Liabilities Carlos Tornero Senior Legal Counsel 12 November, 2010 Geneva Legal 1
2 Modernized IATA Cargo Agency Program >> An Intermediary can tender cargo to Carriers as: An agent of the airlines ( Cargo Agent ); or A shipper ( Forwarder ). Legal 2
3 Terminology >> Intermediary a generic term for both Agent and/or Forwarder. Cargo Agent an Intermediary who acts on behalf of a Carrier and in accordance with its instructions in the conducting of Air Waybill transactions. Forwarder an Intermediary which issues air waybills on a principal to principal basis which is required to insert its name in the Shipper box on the air waybill. Legal 3
4 What does it mean to be an Agent? >> One who acts on behalf of or in place of another by authority from him (Black s Law Dictionary). As a Cargo Agent you are: Standing in the shoes of the Carrier Acting on behalf of the Carrier Bound by Carriers Instructions The shipper is contracting with the Carrier through the Agent and has contract rights directly against the carrier. Legal 4
5 What does it mean to be a Principal? >> A principal contract is a contract that is entered into by both parties on their own account (Black s Law Dictionary). As a Principal you are acting on your own and so you are not the agent of the Carrier. The shipper is transacting directly and exclusively with you, the Forwarder, and you are arranging for transportation services through a carrier of your choice. (Shipper has no contract relationship with Carrier) Legal 5
6 Where does the Carrier s liability start? >> Intermediary acting as Cargo Agent Agent s Departing Warehouse Carrier s Receiving Warehouse Carrier s Liability Legal 6
7 Where does the Carrier s liability start? >> Intermediary acting as Forwarder Forwarder s Departing Warehouse Carrier s Receiving Warehouse Carrier s Liability Legal 7
8 The Dilemma >> Intermediaries place their name in both the Shipper s Box and Issuing Carrier s Agent Box of the Air Waybill How to determine if a forwarder is acting as agent when the forwarder is shown as both shipper and agent on the air waybill? How to ensure that the bulk of forwarder consignments are governed by the same rules as to contract formation and receipt of cargo as true shipper consignments? Freight Forwarder A Freight Forwarder A Legal 8
9 Steps Taken By Cargo Agency Conference >> Reso. 805zz Attachment A - Cargo Intermediary Agreement Definition of Forwarder: An Intermediary which issues air waybills on a principal to principal basis and which reflects its name in both the Shipper and Agent boxes on the air waybill. Scope of Mutual Representation (Part II Section 1): the Forwarder does not act as agent for the Carrier. If your name appears in both boxes you will be deemed a Shipper only, acting as a principal. Legal 9
10 Steps Taken By Cargo Agency Conference >> Remove Article 5.4 (Part III Section 5) If the Intermediary accepts goods for carriage by air without the carrier(s) being specified, the Intermediary shall be liable for loss of or damage to such goods until they have been delivered to the Carrier Legal 10
11 Steps Taken By Cargo Agency Conference >> Add Section 3 Obligations of Agent toward the carrier (Article 1, Section 1.1) 3.2 If the Cargo Agent accepts goods for carriage by air without the carrier(s) being specified, the Cargo Agent shall be liable for loss of or damage to such goods until they have been delivered to and accepted by the Carrier; Legal 11
12 Steps Taken By Cargo Agency Conference >> Add Article 2.4 (PART II Section 2) 2.4 The Airfreight Forwarder shall be liable for loss of or damage to the consignment until it has been delivered to the Carrier in Ready for Carriage condition as set forth in Section 6 hereof. Legal 12
13 Steps Taken By Cargo Services Conference >> CSC amended RP Conditions of Carriage for Cargo New definition of Agent (Article 1.1) AGENT Except when the context otherwise requires, any person who has authority, express or implied, to act for or on behalf of carrier in relation to the carriage of cargo unless that person is acting as SHIPPER with respect to a SHIPMENT governed by these conditions of carriage. Legal 13
14 Steps Taken By Cargo Agency Conference >> Keep definition of Shipper as is (Article 1.14) SHIPPER is defined as The person whose name appears on the Air Waybill or Shipment Record, as the party contracting with Carrier for the Carriage of Cargo. Legal 14
15 Steps Proposed by CNS (1/3) >> Cargo Network Services is the US subsidiary of IATA and does not fall entirely within our CAC and CSC Resolutions CNS developed a Cargo Agents and Authorized Intermediary Agreement Under this agreement Authorized Intermediary is equivalent of Forwarder in IATA Cargo Agency Program It is proposed to amend this Agreement when acting as an Authorized Intermediary Legal 15
16 Steps Proposed by CNS (2/3) >> Proposed changes to the CNS Cargo Agent and Authorized Intermediary Agreement : Don t hold yourself out to the public to be the agent of any CNS Member airline Notify your shipper clients that you are undertaking to arrange the shipment of their cargo to destination Notify your shipper clients that you shall contract directly with air carriers for such air transportation as may be necessary for that purpose Legal 16
17 Steps Proposed by CNS (3/3) >> Proposed changes to the agreement: Write "Not Applicable" or "N/A" in the "Issuing Carrier's Agent" Box on the CNS MAWB Write your name only in the "Shipper" Box on the CNS MAWB (if also entered in the Agent box you will be considered an Authorized Intermediary) Write " Your Company Name goods of your shipper client name on the CNS MAWB "Shipper Box if your shipperclients' name must appear (e.g. For customs purposes) Legal 17
18 Practical Consequences? >> Intermediaries can still act as either: 1. Forwarders or 2. Cargo Agents Direct Shippers can still appear on the Air Waybill Forwarders can still include their IATA Agent s Code Accounting or systems Issues? Legal 18
19 Thank you. Legal 19
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