Recent decisions by US courts, particularly within the Second Circuit (New York), suggest a notable change in how the term "package" is interpreted under the Carriage of Goods by Sea Act (COGSA). Historically, the definition of a "package" has been a complex and frequently litigated issue, directly impacting the liability limits for ocean carriers in cases of cargo loss or damage. The new judicial trend appears to favor a more contractual approach, giving greater weight to specific definitions of "package" explicitly stated within bills of lading.
This shift means that if a bill of lading clearly defines what constitutes a "package" for liability purposes, courts are more likely to uphold that contractual agreement. For freight forwarders and shippers, this development is crucial. It implies that the language used in bills of lading will become even more critical in determining potential recovery in the event of cargo claims. Forwarders should carefully review and understand the "package" definitions in their bills of lading, as these clauses could directly influence the maximum compensation available from carriers for lost or damaged goods. This could lead to reduced carrier liability exposure, potentially impacting cargo insurance requirements and claim strategies for shippers.
