Herewith an interesting article on a topic which many of us in the customs and supply chain industry are not always fully aware of – authored by Tony Norton and Crispen Camp of Edward Nathan Sonnenbergs.
Over ninety percent of the world‟s commodities are transported by sea. Since the 1960‟s, containerised cargo has steadily grown to become the leading means by which goods are transported across the world‟s oceans.
Importers of containerised cargo have to consider a number of factors when contemplating the most cost-effective means to bring about the importation of their goods. These factors include the financing of the transaction, insurance, customs duties as well as how the goods are to be conveyed. Importers that have their places of business located at an inland destination, such as Johannesburg, also have to consider who will undertake the onward carriage to Johannesburg from a discharge port such as Durban.
The contracts which govern the conveyance of the cargo are in most cases evidenced by the terms of documents known as „bills of lading‟. Bills of lading traditionally perform three functions, namely: they act as a receipt by the carrier of the cargo concerned; they evidence the terms of the contract of carriage, and they reflect the entitlement of the holder thereof to the goods.
The parties reflected on the Bill of lading are ordinarily the shipping line engaged to transport the goods which is reflected as the carrier, the shipper of cargo and the party to whom the cargo has been consigned.
The terms of the agreement of sale concluded between the exporter and importer of the cargo will impose the obligation on one of the two parties to arrange the transport of the cargo to either the discharge port, for example, Durban, or point of final destination, for example, Johannesburg. Where the agreement of sale does not impose a duty on the exporter to arrange the transport of the cargo to final destination, the importer will have to arrange to do so.
Where an importer has to arrange for the transport of cargo to an inland destination it can do so by a number of different methods.
Firstly, it can make its own arrangements to contract a local road or rail haulier to do so. This is generally known as “merchant haulage” in that it is the merchant or receiver that contracts for the haulage, which has nothing whatsoever to do with the ocean carrier. In those circumstances, if the cargo is lost or damaged en route on the land leg between, say, Durban and Johannesburg, the merchant looks directly to the local road or rail haulier and not to the ocean carrier for compensation. Of course the advantage for importer in choosing to arrange for the onward carriage of the cargo to Johannesburg is that it will be in a position to negotiate transport rates with its nominated road haulage company.
Secondly, the importer can arrange to ensure that the bill of lading contract for the carriage of the cargo extends to Johannesburg, in which event the land leg is generally known as being covered by “carrier haulage”, with the ocean carrier being directly responsible for any loss of, or damage to, the cargo during that leg subject to the terms of the bill of lading concerned.
Lastly, there is a third variation which is commonly and misleadingly known as “carrier assisted haulage” or “carrier haulage”. This is when the importer approaches the ships agent of the ocean carrier to arrange for the on carriage of the cargo from the discharge port, for example, Durban, to the point of final destination, for example, Johannesburg. However, the ships agent generally has no authority from the ocean carrier in these circumstances to agree to extend the ocean carriage to a point of final destination and any assistance rendered by the ships agent in this respect is generally intended by the ships agent to be rendered with the importer as principal so that the contract for the road or rail haulage is directly between the road or rail haulier and the importer, and not between the ocean carrier or the ships agent, on the one hand, and the importer, on the other.
The problem here is that the correspondence between the parties in this respect does often not clearly reflect that intention, with the term “carrier haulage” or “carrier assisted haulage” leaving the importer with the impression that the ocean carrier or the ships agent is responsible for the road or rail haulage of the cargo and the actual agreement between the ships agent and the importer not clearly reflecting who is responsible one way or another.
As a general rule of thumb importers should be aware of the fact that if the contract of carriage in the bill of lading does not extend to the inland point of final destination, it is unlikely that the ocean carrier will assume responsibility for the road or rail haulage concerned. In those circumstances, the agreement for the road or rail haulage with the ships agent concerned should be closely examined and clarified to ascertain who the responsible party is for the road or rail haulage leg. Generally it will be found that the intention is that it is the road or rail haulier contracted by the ships agent, on behalf of the importer, notwithstanding the term “carrier haulage” or “carrier assisted haulage” applied to that situation.
In an ever increasing globalised world economy, the transportation of containerised goods will only continue to expand and, in this environment, importers of goods will have to consider numerous factors along the import chain, not least of which will be whether or not to conclude land leg merchant or carrier haulage contracts or variants thereof and to properly understand the significance of them.
- What is the difference between Carrier Haulage & Merchant Haulage..?? What are the implications..?? (theshippingblog.wordpress.com)