Carriage of Goods by Sea Act (COGSA)

The Carriage of Goods by Sea Act (COGSA) is the federal statute, printed as a note to 46 U.S.C. 30701, that governs the contract of carriage in a bill of lading. Section 13 applies it to "all contracts for carriage of goods by sea to or from ports of the United States in foreign trade", so it covers every import and export container moving on an ocean bill, including an NVOCC's house bill.

What COGSA covers: tackle to tackle

Under section 1(e) the Act covers the period from the time the goods are loaded on the ship to the time they are discharged from it, which is why it is described as a tackle-to-tackle regime. Section 7 leaves the periods before loading and after discharge to the contract: the bill of lading's own terms decide the carrier's liability in the terminal, the container yard or on an inland leg.

The carrier's duties and defenses

• Duties: before and at the beginning of the voyage the carrier must exercise due diligence to make the ship seaworthy and fit to carry the goods (section 3(1)), and it must properly and carefully load, handle, stow, carry, keep, care for and discharge them (section 3(2)). On the shipper's demand it must issue a bill of lading (section 3(3))
• Defenses: section 4(2) excuses the carrier for loss caused by, among others, errors in navigation or management of the ship, fire (unless caused by the carrier's fault), perils of the sea, acts of God, war, strikes, the shipper's own act or neglect, and latent defects
• No contracting out: a clause that relieves the carrier of the liability section 3 imposes, or lessens it other than as the Act allows, is "null and void" (section 3(8))

The $500 limit

Section 4(5) limits the carrier's liability to $500 per package, or per customary freight unit for goods not shipped in packages, "unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading". What counts as a package depends on how the bill describes the cargo, so the package count on the bill and the packing list matters. Declaring a higher value on the bill raises the limit but costs extra freight, which is why cargo owners normally buy insurance on Institute Cargo Clauses instead.

Deadlines that decide claims

• Notice: written notice of loss or damage at the port of discharge before or at the time the goods are removed; if the damage is not apparent, within three days of delivery (section 3(6)). Without notice, removal is prima facie evidence that the goods were delivered as described in the bill
• Suit: the carrier is discharged from all liability unless suit is brought within one year after delivery (section 3(6))

Common mistakes

• Signing a clean delivery receipt and reporting damage weeks later, after the three-day window
• Assuming the carrier pays the invoice value. It pays at most the per-package limit, after its defenses, and nothing toward a general average contribution you owe
• Letting the one-year suit period run while a claim is negotiated

The cargo insurance page compares COGSA with the air (Montreal Convention) and US trucking (Carmack Amendment) limits.