Carriage of Goods

With the changing economic scenario, factors like globalization of different market aspects, international economic integration and removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirements, which is essential to the expansion of opportunities and plays an important role in making or breaking the competitive positioning.


International Trade relies on international transport which provides the basis for which goods and services across international boundaries. International transport also provides an important legal function on International Trade since it provides a link between the buyers and sellers of the goods and services being traded.

Carrier means any person or corporation engaged in the business of a common carrier of goods for hire whether by land or by any mode of transportation. Multimodal transportation is the movement of cargo from one point of origin to the final destination within any countries by using two or more modes of transport. Therefore, the combination of all four modes i.e. (a) Air (b) Road (c) Rail and (d) Sea is defined as ‘Multimodal Transport System’.

Carriage is simply defined as the transportation of goods or cargo from one location to another. It is however not as simple as it sounds as it eludes components such as loading, storage, transportation, unloading and delivery. Carriage of goods, in laws, the transportation of goods by land, sea or air. The relevant law governs the rights, responsibilities, liabilities and immunities of the carrier and of the persons employing the services of the carriers.

Contract of carriage is a contract of bailment for reward. However, the contract of bailment is modified by different statues in the case of carriage of goods by land, sea or air.


While Carriage of goods has been done in multimodal transportation, there are some rules and regulations abide with single or various contracts of carriage of goods. Carriage is often considered as the final step of sale of goods. The shipper or the consignor is known as the owner or vender of the goods to be carried for and the consignee is termed as the buyer of such goods. Risk and title to the goods is frequently passed through during the process of contracts of carriage. It is normally treated as the title passes through when the risk passes too but eventually this concept changed and it is being noticed that the passing of title is not that much relatable to the passing of the risk and it is completely relying on the norms of the contracts and will of the concerned parties abide to the contract of carriage.

According to the conditions in the Contract of carriage, if the sale of goods is done on FOB i.e. Free on board, then it is a mandatory task for the seller to deliver the goods to the transport to be carried to the buyer. Delivery to the buyer can be considered when the goods are loaded in the transport carrier and past this act, all the risks and damages of goods are termed as on buyer’s responsibility.

On contrary, when the sale of goods is done on CF i.e. Cash & Freight or CIF i.e. Cash, Insurance & Freight The mandatory task of the seller is to deliver the goods to the named address of destination of the buyer mentioned in the contract. During this process, the cost of all the loss and damage of the goods shall be carried by the seller and past the delivery of goods, the risk of loss or damage of goods belong to the buyer.

On another aspect, if the sale of goods is done “Cash against documents” the title passes to the buyer from the seller if the buyer pays the full amount of the carriage and receives a proof of bill against the payment, but the risk keeps sustained with the seller until the final delivery of the goods. This can be done with the use of letters of credit or with the help of financial institutions termed as intermediaries. Similarly, when there is a specific term mentioned in the contract of carriage regarding the title retention with the seller until final payment is made in full, the title of such consignment shall not pass from the seller to the buyer until the payment is made in full and final.



The consignor or the seller can be defined as the parties that contract with the carrier of the carriage of the goods. Henceforth, the consignor has the right of suit upon carrier. But this can be termed as void when the property of the goods passed from the consignor or seller to the consignee or the buyer.


 The consignee or the receiver can be defined as the party who receives the goods dispatched from the consignor to the named address mentioned in the contract for delivery. The possession of the carriage remained sustained with the seller until the final delivery of the carriage to the destination. The possession shall be passed from the consignor to the consignee when the sale of goods has been done in cash against documents mode and the consignee has the valid proof of bill or bill of lading.


The owner of the carriage can be the consignor or the consignee that depends on the clause mentioned in the contract of sale. If the owner has no contractual nexus abide with the carrier, its right to sue depends on the common law which recognizes the owner of the goods to sue for the loss or damage of the goods.


When it comes to international sale of carriage, the transactions of sale are usually done by the financing companies with the use of letter of credits. These companies may hold the rights or ownership of the negotiable bills of lading but don’t hold the ownership or entity or authority of the carriage. They hold the bills of lading for security but no title or possession pass on to them.


In most carriage cases, there are numbers of intermediaries involved who are not considered as any party and act as a third-party agent. They may be the freight forwarder who acts as an agent for the consignor in arranging carriage for the goods and not considered as a carrier until they have a valid bill of lading suggesting the undertaking of carriage. A custom broker can be defined as an agent who acts on clearing the consignment from the customs for the consignee. Other parties involved such as stevedores, warehousemen and land carriers at the port of shipment or port of destination and their liabilities and duties are applicable according to the local law.


Before the railroads, sea was the most convenient and commonly used mode of transport for carriage of goods. During such process, while the ship owner and the consignment owner have their own clause intervened and was contemporarily exempted from the clause included in the national laws, the international community of trade acknowledged it and made some necessary framework which served two purpose i.e. (i) flexibility to assign risks in line with their commercial needs, and (ii) prevention of abuse and protection for parties in a weaker bargaining position. [1] 

This later on introduced the Hague Rules in1920s [2] which came into implementation when the carriage of goods is done by sea. This was the first international convention which implied the standard unification of bill of lading laws and helped in establishing a minimum protection of title as well as of the freight. In 1968, the Hague rules was amended as Hague-Visby rule which was followed by many maritime nations for both international trade and domestic legislations while many objectified the rule stating it was being out of the line for the modern trade and international shipping.

The Carriage of Goods by Sea Act, 1992 [3] made some viable changes in pre-existing Hague-Visby rules related to the shipping of goods, updating and replacing the bill of charge act. In 2002, a new regime was passed to the United Nations Commission on International Trade Law and finalized by such. In December 2008, the General Assembly of the United Nations unanimously adopted a new shipping treaty, the United Nations Convention on Contracts for the International Carriage of Goods wholly or partly by Sea. This convention was then formally opened to signature at Rotterdam on September 23, 2009, after which it has since been popularly christened the Rotterdam Rules. [4] 


After sea, air is being considered as the most effective mode of transport for carrying of goods. The Warshaw convention, in 1929 implemented with some revised regulations from the Hague rule that air can be a significant way of transport of goods, carriage, people and there should a unified law system to undertake the regulations attached to the transport of carriage through air.

Preventing the Warshaw-Hague convention, the Guadalajara convention came into existence by the Carriage of Goods act, 1962 [5] in the year 1971. The convention made some statutory changes in the pre-existing law of protocol which suggested new amendments related to the monetary cap on the liability of the passenger and their respective luggage but did some remarkable changes in the provisions related to the carrier.

A further modification to the Warsaw-Hague Convention 1955 incorporated the most important changes in the liability regime for freight transport known as the Montreal Additional Protocol Number 4 of 1975. The Montreal Convention of 1999 (Convention for the Unification of Certain Rules Relating to International Carriage by Air) was to take precedence over any rules which apply to international carriage by air. The Montreal Convention of 1999 came into effect on 4 November 2003.


While the mode of transport by Roads has been considered as the easiest way for carriage of goods, it has been under the line of question for being a lengthy process to be delivered. The regulation on the international carriage of goods by road was unified in 1956 with the Convention on the International Carriage of Goods by Road (CMR) drafted by the United Nations Economic Commission for Europe (ECE) based in Geneva and parties to CMR consisting of both ECE and non-ECE members countries. This contract is known as CMR, which is derived from the French title convention relative au contrat de transport international de marchandises par route. CMR is also known as CMR consignment note. The pact standardizes the terms of the contract of carriage, the liability of the carrier and the form of documentation to be used. CMR sets out a single set of conditions for the complete movement of goods, irrespective of the mode of transport or the current legal jurisdiction. The terms of the convention are binding on each contract for the carriage of goods by road for hire or reward when the place of taking over of the goods and the place of delivery as specified in the contract are located in two different countries of which at least one is a contracting party. 


The Carriage of goods act varies from place to place , from country to country. The rules and regulations mentioned in the act are different for carriage of goods, by rail, by sea, by air respectively. The act provides a basic contractual relationship between the consignor and the consignee abide by the rules of concerned jurisdiction. Where the law of the act gives an immunate right over the products to the consignor throughout the whole transit, it also helps the consignee to safeguards their rights over such products during the particular transit. While performing a business, both the consignor and the consignee are tied up under this act and have the full rights and privilege to file a suit or claim for such in front of the court of law.  


[1] John F Wilson, Carriage of Goods by Sea, 7th edition.

[2] Hague Rules in 1920s.

[3] The Carriage of Goods by Sea Act, 1992.


[5] Carriage of Goods Act, 1962. 


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