The number of supply chain partners vulnerable to the new liability loophole uncovered by IFW last month could be far greater than originally thought, and include carriers of all modes, as well as forwarders and warehouse operators.
UK-based freight operator Uniserve was recently found liable in a High Court ruling for a £375,000 (US$610,000) pallet of mobile phone devices that was stolen from one its warehouses in 2003 after being delivered there in error.
The company's CEO, Iain Liddell, said that more than just the forwarding sector could be liable for goods accepted in good faith, but delivered in error.
"If the error is such that your customer didn't intend to deal with you at all, then no contract will arise and you are liable for the full cost of the goods if you are at fault for their damage or loss, " he said.
"An error can be as simple as the principal or his agent delivering the goods to the wrong party, but the party receiving those goods may well have a trading relationship and have every intention of providing a service to the principal or his agent and accept the goods in good faith, totally unaware that an error has been made."
He outlined some potential ways in which hauliers, shipping lines and airlines could find themselves fully liable as the result of errors that would invalidate a contract:
"A shipping company provides a hanging garments service for silk dresses valued at £1.75m going to the UK. However, an error is made and the silk dresses that are delivered and loaded for the UK should have gone to Singapore with another carrier. The shipping company now has full liability for the whole consignment.
"A trailer operator receives two pallets of medical equipment valued at £250,000 for delivery to Spain. However, an error is made, and they have delivered two pallets that should have gone to Sweden with another carrier. The transport company now has full liability for the whole consignment.
"An airline receives one pallet of blue tooth adaptors valued at £375,000 consigned to Hong Kong. However, an error is made and the pallet should have been sent by sea freight. The airline has full liability for the whole consignment."
Forwarders have told IFW they have started to tighten up procedures regarding the arrival of consignments that they were not expecting.
However, Liddell said: "Actually, they should reject these consignments outright.
That's the only thing you can do to not be fully liable. Of course, that way you'll lose customers like there's no tomorrow."
