Posted on: 13-04-2020

Transport or forwarding?

Written by:

Hein Kernkamp

Differences and similarities between transport and forwarding

The terms transport and forwarding are often used interchangeably. Nevertheless, there is legally a world of difference between the two concepts. The carrier is liable for the transport performance, and the forwarder is not liable for the transport performance, insofar as he does not carry out the transport himself. Legally it is arranged as follows.

transport or forwarding?

The contract of carriage

In the Netherlands, the freight transport contract is the contract whereby one party (the carrier) undertakes to transport goods for the other party (Article 8:20 of the Dutch Civil Code). International treaties also apply based on what has been contractually agreed. For example, the CMR Convention applies to contracts for the transport of goods by road for payment.

The forwarding agreement

The freight forwarding agreement is the contract for the transport of goods, whereby one party (the forwarder) undertakes towards its counterparty (the principal) to conclude one or more contracts of transport for the benefit of the principal with a carrier, or to make a stipulation in one or more such transport contracts for the benefit of the principal (Article 8:60 of the Dutch Civil Code).

The 'quasi' carrier

Like the freight forwarder, the carrier does not have to transport himself. Suppose A gives an order to B for transport by road from Rotterdam in the Netherlands to Duisburg in Germany, which B outsources it to C, who is the carrier? In any case, C has taken it upon himself to carry the goods by road. But we don't know exactly about B yet. Did he contract to transport or to render forwarding services? Sometimes, prior to the conclusion of the contract, it is clear that B will act as carrier or forwarder and if the parties subsequently act exactly according to the agreements made there is no confusion possible. In reality, this is often somewhat different. Only after the truck topped over in Germany will the parties start to wonder whether it concerns transport or forwarding.

The difference in liability

The carrier's liability is regulated by law and in international treaties, such as the CMR Convention. The carrier has the obligation to deliver the goods to the delivery address in the same good condition. If he does not do this, then in principle liability is involved.

The freight forwarder only has to arrange for the transport. He can of course make mistakes, but he is only liable for his own mistakes and not for the mistakes of the carrier. Furthermore, the freight forwarder can limit his liability in general terms and conditions, such as through the FENEX conditions (Dutch Forwarding Conditions), which also often happens. So there is a completely different liability regime. That is why the question whether a transport or a forwarding contract has been concluded is legally relevant. So it all comes down to good contracting and executing the agreement as agreed. The freight forwarder must contractually bind himself to arrange for the transport, but not to carry out the transport itself.

Selbsteintritt

But there are also freight forwarders who also have their own equipment and who, if it is convenient, use it for the transport of cargo, while they have concluded a forwarding agreement with the client. This is the so-called selbsteintritt, for which there are statutory regulations. Article 8:61 of the Dutch Civil Code stipulates that the forwarder who carries out the transport himself is regarded as the carrier under that agreement. Clauses that deviate from Article 8:61 of the Dutch Civil Code are null and void, so that the forwarder assumes normal carrier liability in that case.

The Forwarding Agent Statement

If the forwarder has acted as a forwarder and damage occurs, the forwarder cannot sit and wait. Article 8:63 of the Dutch Civil Code obliges the forwarder to immediately inform the principal of the transport contracts he entered into in order to fulfill his obligation. The freight forwarder is also obliged to provide the client with all documents and data that he has or can reasonably provide, insofar as these can at least serve to recover damages that have arisen.

Sanction for not making a freight forwarder's declaration

If the freight forwarder does not fulfill this obligation, then the third paragraph of Article 8:63 DCC applies and the freight forwarder will be liable for damage that the principal suffered as a result, which will be equal to the compensation that the principal could have obtained from the freight forwarder in case of Selbsteintritt, less the compensation that the the principal possibly obtained from the carrier.

The third paragraph of Article 8:63 DCC therefore penalizes the failure of the forwarder to fulfill this obligation as a sanction that in that case the forwarding agent is treated as if there had been the Selbsteintritt of Section 8:61 of the Dutch Civil Code. In the Parliamentary History of Book 8 of the Dutch Civil Code it is formulated as follows: "If the forwarder does not cooperate with his principal as referred to in this article, the law will make the freight agent pay compensation, as if he had acted as carrier."

And relying on the FENEX conditions does not help here. Article 14 of the FENEX conditions provides that Article 8:63 paragraph 1, 2 and 3 of the Dutch Civil Code simply applies! In short, it is wise for the freight forwarder to pay the necessary attention to his obligations under the law.

Conclusion

It is needed to know the difference between carrier and forwarder and act accordingly. Try to make clear agreements with principals and to comply with them in accordance with the agreement. And if something goes wrong, do not sit still, but collect relevant documents, analyze the situation and take appropriate measures. That can just make the difference.

Information

The situation becomes even more complicated when international aspects come into play. Situations can be complex and get out of hand. If you would like to discuss your situation with a lawyer with years of experience in the field of transport law, you can of course contact us to discuss this without obligation. It is not without reason that our motto is "Your problem, our concern."

More information?

Hein Kernkamp will gladly help you further.

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