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Unit 10: Containerization and Leasing Practices

The Warsaw Convention provides for maximum liability of 250 Gold Francs per kg. of gross Notes
weight lost or damaged or higher declared value as agreed upon between the carrier and the
shipper. One Gold Franc is equivalent to 65.5 milligrams of gold of 900 milisimal fineness.
National laws enacted on the basis of Warsaw Convention provide for liability mainly in terms
of US dollars. The Convention states that the carrier cannot reduce its liability from the Warsaw
Convention provision.
Under the Convention, the carrier is to issue a copy of Air Waybill at the destination to the
consignee and give delivery against surrender of this COPY. In case of non-delivery of cargo,
the consignee is to lodge complaint to the carrier not later than 14 days of the arrival date or the
expected arrival date. In case of damage, consignee is to give notice to the carrier within seven
days of the receipt of cargo. Where carrier has not accepted the claim, case against the carrier is
to be filed within two years of non-defective delivery.

10.3.3 Bailment

A bailment is the relationship created by the transfer of possession (not title) of an item of
personal property by one party called the bailor, to another party called the bailee, for the
accomplishment of a particular purpose. Whenever you transfer, lend or store personal property
to, or for, another you should think bailment.
Common Carrier is an enterprise that agrees, for a fee, to transport goods for anyone who
applies, provided the goods are lawful and fit for shipment. It enforces reasonable rules and
regulations for the conduct of its business. Example it may enforce rules stating how goods must
be packed. It can charge an amount negotiated with the Bailor or, if the carrier is regulated by the
government, charge the scheduled rate.

Bailment for hire: A bailment for hire arises when the bailor, for a fee, provides personal
property (such as a car, truck, tool, machine, or other equipment) for use by the bailee.

Bailment’s for Sale: Goods may be sent on consignment by a manufacturer to a retailer.

Note In all legal systems, the peculiar liabilities imposed on carriers extend only for the
duration of the carriage, that is, from the time the goods are delivered to the carrier for
shipment until the carrier has taken all reasonable steps to deliver them to the consignee.

10.3.4 Loss Prevention

The broad scope of the transporting freight makes loss prevention an issue. The transportation
provider has one all-encompassing job of maintaining the goods from one location to another
location. Of course, there are many risk factors associated with this task. Loss prevention activities
include plant inspections to assess transportation risks in exportation products and review of
processing techniques, packaging, freezing methods, controls, material handling, proper stuffing
and stowage, in order to reduce risks and eventual claims.
Operation losses are the cost of conducting business. Equipment fails, employees make mistakes,
and breakdowns happen. These mishaps are responsible for contributing to business loss but
they are a built-in expense. A different, more controllable category of loss is asset and property
theft. Employee pilferage is known to be the most common reason for theft within a company.
Naturally, there are industry-established precautions to curb these statistics.
Having a strong employee structure keeps the checks and balances to make certain people are
accountable for their behavior. Sometimes, hiring an outside consultancy specializing in loss

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