transporting Cargo ~ Courier directed to pay for delay in delivery

Every trader ships their cargo with business interest of earning a profit – that is best achieved by making the goods available where they are in demand.  The profit is determined by demand and supply as also availability at that wanted hour.  Thus delay in transportation – whatsoever be the reason will only affect the trader. 

The conditions of carriage are often in fine print and much difficult to understand.  A Carrier is not an Insurer against delay – but contract of carriage enforces a legal duty to deliver in the agreed time schedule.  However, the bill of lading and contract of carriage specifies that the Carrier is not liable for loss, damage or delay.  It is expressly stated that the Carrier does not undertake that the Goods or any documents relating thereto shall arrive or be available at any point or place at any stage during the Carriage or at the Port of Discharge or the Place of Delivery at any particular time or to meet any particular requirement of any licence, permission, sale contract, or credit of the Merchant or any market or use of the Goods and the Carrier shall under no circumstances whatsoever and howsoever arising be liable for any direct, indirect or consequential loss or damage caused by delay.  If the Carrier should nevertheless be held legally liable for any such direct or indirect or consequential loss or damage caused by delay, such liability shall in no event exceed the Freight paid.

Legal experts however opine that there is potential liability of the carrier for the delay.  Air Carriage prescribes limits of delay in delivery of baggage beyond certain hours and the limits vary between domestic and International flights.  In Sept. 2014, Times of India reported of this interesting case where Courier firm were asked to pay artist Rs. 5 lakh for negligence.

TOI reported that the State Consumer disputes redressal commission directed two courier companies to pay a citybased painter a relief of Rs. 5 lakh for failing to deliver her paintings in time. Padmini Rao, of Kilpauk Garden Road, had couriered five boxes containing 85 oil canvas paintings to New Orleans, Louisiana through two companies -DTDC Courier and TNT India Private Ltd.

Rao's counsel T V Lakshmanan said that her husband Ramachar Murali had booked a booth for the exhibition and sale of the paintings at a four-day Rotary International Convention, which was being held from May 21, 2011. The proceeds from the sale were to be donated to the Rotary Foundation. DTDC courier, which received the paintings on May 12, did not send it to the concerned airline carrier till May 15, Lakshmanan said. Five days later, TNT India, which was to off-load the consignment, “gave a vague assurance“ that the parcel would reach JFK Hub, New York by 1.30pm. Despite Murali's repeated calls to the courier companies underlining the “urgency of receiving the parcel immediately,“ the consignment was delivered only around 11am on May 25, the last day of the convention. Because of the negligence of the companies, Rao suffered “enormous mental agony, and a loss of $6000,“ said the counsel.

Subsequently, the couple moved the Commission stating that the parcel should have taken only three days to reach. They said that in case of an “extraordinary delay,”  it should have been delivered by May 20, adding that when they sought redressal, the Courier firms offered only an apology letter with a paltry sum as compensation. The bench of president R Regupathi, judicial member A K Annamalai, and member P Bakiyavathi said the companies had admitted the delay and had tendered apology. The companies had also offered to return the freight charges. Despite being issued notices, the two firms had, however, failed to appear before the commission. The arguments of Rao and Murali had not been challenged, said the bench, adding that it was a fit case for negligence and deficiency in services.

The Forum  then directed the companies to pay Rs 3 lakh as compensation for the expenses incurred for travel, accommodation, and booking of commercial space at the convention. The bench also slapped Rs 2 lakh fine for causing mental agony and negligence along with Rs 5,000 as case costs.

Insurance coverage is wider than the responsibility of the Carrier.  However, under Institute Cargo Clauses and other insuring terms, delay is specially excluded.   The coverage is worded stating that the Insurer on ship or goods is not liable for any loss proximately caused by delay, although the delay be caused by a peril insured against.

With regards – S. Sampathkumar

9^th Feb 2015.