Freight Forwarder Liability: COGSA, Carmack, and Montreal Claims

Freight forwarder liability turns on two questions: what role the forwarder played in your shipment, and which transportation law governs the leg where the loss happened. A forwarder acting only as your booking agent owes you reasonable care in picking a carrier and little else. A forwarder that issues its own bill of lading steps into a carrier’s shoes and can be held directly responsible for the cargo, subject to the caps, defenses, and deadlines set by the Carriage of Goods by Sea Act for ocean freight, the Carmack Amendment for domestic trucking, or the Montreal Convention for international air.

Agent or Principal: The Threshold Question

Before arguing about damages, figure out what legal hat the forwarder was wearing. An agent-forwarder arranges transportation on your behalf. Its duty is narrow: pick a competent, properly licensed carrier and book the shipment correctly. If it did those things, a damage claim against the agent typically fails, and you have to pursue the underlying carrier.

A principal-forwarder is a different animal. Under 49 U.S.C. § 13102, a domestic freight forwarder is an entity that assembles and consolidates shipments and “assumes responsibility for the transportation from the place of receipt to the place of destination.”¹ The Carmack Amendment goes further and treats the forwarder as “both the receiving and delivering carrier.”² The tell is the paperwork. If the forwarder issued its own bill of lading, you likely have a direct claim against the forwarder instead of chasing the trucker or ocean line that physically handled the cargo.

Ocean Shipments: COGSA and the $500 Trap

The Carriage of Goods by Sea Act covers cargo from tackle to tackle, meaning from the time goods are loaded onto the vessel until they are discharged. During that window the carrier must exercise due diligence to make the ship seaworthy and to properly handle, stow, and care for the goods.³

Recovery is capped at $500 per package or customary freight unit unless you declared the cargo’s nature and value on the bill of lading before the ship sailed.³ The figure has not been adjusted since 1936. On a container holding ten pallets with no value declaration, the ceiling is $5,000 regardless of what the goods were actually worth. Shippers routinely learn about the cap only after a loss. Declare the value in writing at booking if the cargo is worth more than the statutory minimum.

Domestic Trucking and Rail: The Carmack Amendment

For goods moving by truck or rail inside the United States, 49 U.S.C. § 14706 imposes strict liability. You do not have to prove negligence. Show that the cargo was in good condition when tendered, that it arrived damaged or did not arrive at all, and that you suffered a measurable loss.²

Because Carmack treats the forwarder as both the receiving and delivering carrier, you can sue the forwarder directly instead of tracking down the subcontracted trucker. Carmack recovery is the actual loss, not a fixed cap, but carriers routinely limit exposure through released-value rates and tariff provisions. If you booked at a discounted rate tied to a lower declared value, the payout is capped at that figure. A small ad valorem charge at booking to declare the true value avoids that limit.

International Air: The Montreal Convention

The Montreal Convention governs international air cargo and holds the carrier liable for damage occurring while the goods are in its charge.⁴ The carrier can escape liability by proving the damage was caused by an inherent defect in the cargo, defective packing, an act of war, or a government order relating to entry or transit.

Liability is measured in Special Drawing Rights, an IMF currency unit. The cap sat at 22 SDRs per kilogram for years, and ICAO has set it to increase to 26 SDRs per kilogram.⁵ At an early-2026 rate of roughly $1.36 per SDR, the newer cap is about $35 per kilogram.⁶ A 500-kilogram pallet of electronics worth $200,000 recovers about $17,500 unless a higher value was declared and the additional charge paid at booking.

Deadlines That Kill Claims

Every framework runs its own clock, and the windows are shorter than most shippers expect.

Ocean (COGSA)

Written notice of visible damage must reach the carrier or its agent at the port of discharge before or at the time the goods are removed. For non-apparent damage, you have three days from delivery. Late notice does not automatically bar the claim, but it creates a presumption that the carrier delivered the goods as described on the bill of lading, which you then have to overcome with other evidence. The hard cutoff is one year from delivery, or from the date the goods should have been delivered, to file suit.³

Domestic Ground (Carmack)

Carriers must allow at least nine months to file a written claim and at least two years to sue. The two-year clock starts running only when the carrier sends written denial or partial disallowance. A settlement offer does not count as a denial unless the carrier explicitly states in writing that the claim is disallowed and gives reasons.⁷ Some carriers drag out negotiations without ever issuing formal denial. Ask for the denial in writing so the clock actually starts.

International Air (Montreal)

File a written complaint within 14 days of receiving damaged cargo, or 21 days for delay claims.⁴ Total loss where no delivery occurs has no notice deadline, but the suit clock still applies: two years from the date the aircraft arrived at its destination, should have arrived, or the date the carriage stopped.⁸ Courts dismiss late air cargo claims regardless of the merits.

Defenses the Forwarder Will Raise

Carriers do not pay every claim, and each framework hands them a set of defenses.

COGSA lists seventeen exemptions, including natural disasters, acts of war, fire not caused by the carrier’s fault, inherent defect of the goods, insufficient packing by the shipper, and attempts to save life or property at sea. A catch-all covers “any other cause arising without the actual fault” of the carrier, though the carrier bears the burden of proof.³

Under Carmack, the five common-law defenses are act of God, act of a public enemy, act of the shipper, order of public authority, and inherent nature of the goods. The shipper-error defense is the one that comes up most in practice. If the outer container is intact but the contents were poorly packed and couldn’t survive ordinary road vibration, the carrier will point at you. Photos of the packing process and retained packing specifications counter that argument.

The Montreal Convention allows the carrier to avoid liability by proving inherent defect, defective packing, act of war or armed conflict, or an act of public authority connected with the cargo’s entry, exit, or transit.⁴

Building a Claim That Gets Paid

An allegation that something arrived broken will not get you paid. Thin files get denied. Assemble the following before submitting:

The original bill of lading showing the goods were tendered in good condition. Notations of damage at origin or “shipper load and count” language weaken your position.
The commercial invoice, which proves ownership and financial value. Without it, the forwarder has no basis to calculate the loss.
The delivery receipt with damage noted before you sign. Signing a clean “received in good order” receipt creates a presumption against you.
Photographs taken at delivery of both the exterior packaging and the contents. A timestamped photo from the dock outperforms a well-written claim letter.
The packing list, so the forwarder can distinguish items missing or damaged from items never shipped.
A third-party inspection report for high-value claims. A marine cargo surveyor typically costs several hundred dollars and can turn a denial into a payout.

Submit through the forwarder’s formal channel, whether certified mail, an online portal, or a specific method required by the bill of lading. The investigation ends in either a settlement offer or a written denial. If the denial is wrong, that written denial is what starts the suit clock.

Concealed Damage and the Duty to Mitigate

When the outer packaging looks fine but the contents are wrecked, the carrier will argue the damage happened after delivery. No federal law sets a universal reporting deadline for concealed damage, but for less-than-truckload shipments the industry standard under the National Motor Freight Classification is notice within five business days of delivery. Missing that window doesn’t automatically kill the claim; it shifts the burden to you to prove the damage wasn’t caused by your own handling.

Whenever you discover damage, you have an affirmative duty to minimize the loss. That means protecting damaged cargo from further harm, preserving the goods and all packaging until the carrier authorizes disposal, and not moving or reshipping the cargo before the claim resolves. Discarding packaging or continuing to use a partially damaged product before inspection is one of the most common reasons claims get reduced or denied. Reasonable mitigation costs, including appraisal, repair, and reconditioning, can be included in the claim itself.⁹

Why Cargo Insurance Matters More Than the Statutory Cap

Carrier liability and cargo insurance are different products, and confusing them is expensive. Carrier liability pays only when the carrier is proven responsible, and even then, recovery is limited to the weight-based or per-package caps set by statute. All-risk cargo insurance covers the actual commercial value of the goods against physical loss or damage from virtually any external cause, regardless of fault.

The practical differences add up. Under carrier liability, you carry the burden of proof, and defenses like improper packing or inherent vice can wipe out recovery. Under an all-risk policy, the insurer pays first and pursues the carrier through subrogation. Coverage runs door to door instead of tracking to the specific transit legs a given statute governs. For high-value or fragile shipments, the premium is typically a fraction of a percent of cargo value, which is small compared to the gap between the statutory cap and the actual loss.

General Average: An Ocean-Only Risk Worth Knowing

General average is a maritime doctrine that can cost you money even when your cargo arrives untouched. Under the York-Antwerp Rules, when a ship faces a genuine peril and the crew intentionally sacrifices cargo or incurs extraordinary expense to save the vessel and remaining cargo, every cargo owner whose goods were saved must contribute proportionally to the loss.¹⁰ When a container ship catches fire and containers are jettisoned to keep the vessel afloat, the owners whose containers reached port share the cost of those thrown overboard.

The financial exposure is real. The shipowner holds a possessory lien on your cargo, and the goods stay at the destination port until you post satisfactory security. Insured shippers get a general average guarantee from their insurer. Uninsured shippers post a cash deposit set by the average adjuster, which can reach tens of thousands of dollars per container.¹¹ Shipping by sea without cargo insurance means a general average event can strand your inventory at a foreign port until the cash is wired.

1
Office of the Law Revision Counsel. 49 U.S. Code 13102 – Definitions
2
Office of the Law Revision Counsel. 49 U.S.C. 14706 – Liability of Carriers Under Receipts and Bills of Lading
3
Office of the Law Revision Counsel. 46 U.S.C. 30701 – Definition – Section: Carriage of Goods by Sea Act
4
Cargo Claims. Convention for the Unification of Certain Rules for International Carriage by Air
5
International Civil Aviation Organization. International Air Travel Liability Limits Set to Increase, Enhancing Customer Compensation
6
International Monetary Fund. SDRs Per Currency Unit and Currency Units Per SDR
7
Office of the Law Revision Counsel. 49 U.S. Code 14706 – Liability of Carriers Under Receipts and Bills of Lading
8
U.S. Department of State. Montreal Convention
9
U.S. General Services Administration. Freight Damage Claims FAQs
10
Comité Maritime International. York-Antwerp Rules 2004
11
Comité Maritime International. CMI Brief Guidelines Relating to General Average