Multi Modal Transport

The maritime transport market is diverse:

 it is differentiated by the type of ship (Liner, Tramp, or Tanker)

 the kind of trade (general cargo, bulk cargo, live cargo etc.) and
 the geographical route.

It is run by diverse individuals—the ship-owners, brokers, freight forward operators, shipbuilders

and bankers; who together carry out each year the Herculean task of transporting more than 3000
million tons of cargo by sea.

It embraces not only ships of varied type, design and employment but also the cargo they carry, the
origin and destination of those cargoes, the routes travelled, the men who operate them afloat and
ashore, laws relating to both to the seamen and the ship, insurance and governments of various
countries.

The conditions that govern its operation in one sector do not necessarily apply to another. The sole
function of Merchant Marine1 is to provide services—transport services; it does not produce
anything. Maritime industry is a complex assemblage of many interests and elements; it
revolutionized political, social and economic life of all mankind. It is an international industry that
affects the world economy as a whole.

It should be noted that maritime and air transportations are inherently international in
character and accordingly are an indispensable activity in the international trade in goods; 90-
95% of goods are transported by sea and the remaining by air transport.
Transportation accounts for more than 30% of all trade in services. Transport industry
operates under the regulatory regimes of different jurisdiction.
Different aspects of transportation sectors are governed by:
 different international organizations (ICAO, ILO, IMO, UN, UNCTAD,
UNCITRAL etc.,)
 regional organizations (OECD, EU etc),
 Regional Memorandums of Understandings (MOUs) on Port State Control,
 bilateral agreements and
 national laws of various countries.
Technological developments in the shipping industry particularly in the design,
construction and operation of ships were taking place rapidly. In the bulk carried trade, large
sized bulk carrier vessels and tankers have been introduced in order to secure reduction in
cost and gain economies of scale.

1
Merchant marine is defined as “commercial ships of a nation, privately or publicly owned, as distinct from
Navy.
 For many centuries the sailing vessels were plying in the ocean but the first 50 to 60
years of the twentieth century witnessed the size and speed of ships progressing in geometric
progression from 2000 tons to 500,000 tons increase in size and from 7 and 8 knots to 30 to
40 knots of speed. Fuel economy, the design and compact of engines, sophisticated
navigation technology and instrumentation, radar, gyro-compass, automatic compass etc, are
all innovations of the first half of the twentieth century. Hull fabricated from wood, steel,
ferroconcrete, aluminum alloy, fiber glass, and re-inforced plastics are the innovations in
materials in use. Ships designed for carriage of bulk cargo, for crude oil, combination
carriers, luxury liners, refrigerated vessels, liquefied gas carriers and container vessels, barge
carrying vessels—transformed ocean transportation technology between 1950 to 1975.2
Similarly revolutionary changes have also been taking place in the general cargo trade
with the application of the principle of unitization of cargo. The most important
development in this field has been containerization which has emerged as a modern concept
in inter-modal transport.
Further technological development in the shipping industry brought about the
container shipping which facilitated multimodal transport services.3 The transportation of
containerized cargo has become a common feature in the modern maritime transportation
services which became part and parcel of liner services. These days Liner shipping has come
to be known as container liners. Inter-modal or Multimodal Transportation Services
Containers are box like transport equipment which are specially designed to facilitate
the carriage of goods by one or more modes of transport without intermediate reloading. The
container system aims at:
reducing cost of handling cargo
eliminate delays at ports.
Benefit both shippers and consignees
quicker transport,
cheaper packing and
less susceptibility of cargo to damage and pilferage.

2
From bullock cart to the diesel truck and the air-conditioned buses in the transformation in the means of
transportation by road.
3
Refer para 3.1 of this chapter for further details on development of containerization and multimodal
transportation.
 Besides, the thorough movement of cargo in large units from door to door without
intermediate loading and unloading facilitate the growth of international trade by making it
easier and quicker for manufacturers to send their goods abroad.
Till mid-1970s the containers were the exception rather than the rule. Although in
1986 there were 60% containerization, a substantial amount of cargo could not be
containerized since most developing countries still lacked the infrastructure of roads and
road haulage required to handle containers effectively. Container services have been steadily
expanding and a substantial proportion of the world general cargo trade is presently being
carried in containers. Containersation however, requires huge capital outlay not only in
building and operating container ships but also in equipping the ports and providing the
necessary inland transportation facilities. Container services have therefore been
introduced mostly by ship-owners or consortia of ship-owners belonging to developed
countries. The overseas trade of developing countries, including India, are still carried on by
conventional ships. There are not fully containerized ships in developing countries but quite a
few ships that can carry a limited number of containers, including refrigerated containers.
One of the result of the containerization has been to leave the shipping line with a
large number of empty containers to transport back.
Between 1977 and 1985, major structural changes were taking place in the ship types
used in the deep sea liner trades involving replacement of traditional liners by new specialist
ships such as cellular container ships and ro-ro ships were the two growth areas in the general
cargo trades, reflecting the growth of demand for specialist vessels to handle the newly
emerging bulk trades in cars and gas and the transfer of chemicals from the liner trade into
parcel tankers—a product containerization.
Standard ISO (International Standard Oranisation) containers are by far the most
widely used form of transport for general cargo. The introduction of standard containers for
sea transport was simply an introduction of standard containers for sea transport was simply
an extension of a transport system that already existed within the US. For some years
trucking companies and railways had adopted the concept of a single unit, detachable
from its transport vehicle, which could easily be transferred from one transport mode to
another (inter-modal). At sea, container tankers were introduced in the New York to Houston
trade in 1956, and in 1958 the California to Hawaii trade was containerized.
The deep sea container service was started on the North Atlantic in early 1966 by Sea-
Land, a company set up by Malcolm MacLean, who was a trucker rather than a ship-owner.
His experience in trucking industry had convinced him of the merit of a cargo handling
system that could use all three transport modes—road, rail and sea. The major European liner
shipping companies had by this time also made the decision to set up their own container
services. This involved a major investment in completely new ships, shore based handling
facilities and of course the containers themselves. Because of the size of investment,
consortia were formed—for example, Overseas Container Limited (OCL), which was a joint
venture between P&O, Ocean, British and Commonwealth and Furness Withy (in 1986 OCL
was taken over by P&O and renamed (P&OCL). This approach remains a feature of the
container trades.
Until the introduction of containerization, most liner shipping companies saw their
responsibilities as beginning and ending at the ship’s rail, but the introduction of unitization
widened their commercial interest to embrace the complete transport package from the
point of origin of the container through to its final destination. In some cases the containers
are loaded by the manufacturer, while in other packing takes place at a specialist depot
located at some point as close to the centre of the market as possible. In case of developing
countries, this may not be possible because the inland road system is not adequate to cope
with containers.
Much of the rapid growth in containerization during the 1970s and 1980s was due to
‘market widening’ as containers gained an increasingly large share of the general cargo trade,
progressively pushing out traditional break bulk services, with the result that containerization
now dominates the deep sea liner shipping market.
The containerization also required advancement in the port infrastructure, carriers
themselves started building modern container terminals designed for handling large number
of containers, the terminals are equipped with specially designed giant cranes and other
lifting and moving equipment to permit the carrier to move the containers within their own
terminals and to load stow and discharge the same into and from their container-ships.
The explosive popularity of containerization came about which called for installation
of computers to keep track of the movement of the containers. Containers were economical
efficient method of handling, loading, stowing, discharging and transferring of
hundreds of packages simultaneously by means of mechanized equipment instead of the
former slow costly manual methods of individual package handling. Containerisation not
only enabled the carriers to effect tremendous labour savings but also saved the cargo claims.
By elimination manual handling of packages by longshoremen, it prevents cargo damages
resulting form the throwing or dropping of packages to the deck of the pier or ship
deliberately or otherwise. The risk of damages to cargoes resulting from stevedores carelessly
stowing heavy cargoes on top of delicate ones is eliminated under containerization.
Cargo handled through large standard-size steel containers with the help of giant
cranes became prominent sight in the modern 20th century ports. Containerisation as a mode
of sea transport has gone a step further in the continental countries. Container shipping lines
have assumed new land transit responsibilities by offering door to door service as
distinguished from port-to-port service. This has resulted in the modern combined transport
system also known as multi-modal transport system. This system implies the acceptance of
responsibility by one party for through international movement of goods by different modes
of transport, one at least of which is by sea is covered under GATS multimodal services.
Gains in safety and economy have been achieved by packing and sealing these
containers at an inland point, and transporting them by road and rail to the port of loading for
carriage by one or a series of ocean carriers and at the end of the sea leg, by transport by rail
or road to their final destination.
Containers are generally carried on the deck of the ship. The common carriers or the
Liners carry the containers on their deck. The advent of containerization has facilitated the
development of international inter-modal transport. This system of transport has given rise to
the emergence of a new entity—the multimodal transport operator or combined transport
operator who enters into contract with the shipper for the door to door movement of goods
over different modes of transport. It has also necessitated the introduction of a multi-modal
transport document or combined transport document which would cover the different modes
of transport over which the goods move and which would satisfy the minimum requirements
of the multimodal transport operator, the shipper/consignees, the insurers and banks.
At present, each form of transport is governed by separate international conventions.
The Hague Rules and Hamburg Rules govern the bill of lading pertaining to carriage of
goods by sea. The Geneva Convention 1956 (CMR) governs the international transport
document for the carriage of goods by road; the Berne Convention 1952 (CIM) governs the
transport document for the carriage of goods by rail; and the Warsaw Convention 1932, as
modified by the Hague Protocol of 1967 governs the transport document for the carriage of
goods by air. As rules and regulations governing the responsibilities and liabilities of the
carrier differ under these conventions, it has been found necessary to lay down uniform
international regulations to govern inter-modal transport operators. Such regulations would
cover not only the responsibilities and liabilities of the combined transport operator but also
other matters pertaining to the combined transport document, customs formalities etc. in the
mean time, combined transport documents or rules pertaining to such documents have been
prepared by individual carriers, shipping conference, freight forwarders and international
organizations like the Baltic and International Maritime Conference and the International
Chamber of Commerce are being used in international inter-modal transport.
COMBINE TRANSPORT BILL OF LADING
The use of containers for consolidation of cargo was one of the most important
developments in the transport industry in the later part of the 20 th century. They reduced loss
caused by congestion, delay and pilferage at ports. Improvement in the transport management
through information technology, innovative ship and other vehicle building methods also
contributed to the emergence of muti-modal transport (also called inter-modal and combined
transport) i.e. door to door carriage using two or more modes of transport. The growth of
multimodal transport brought with it the evolution of single transport documents, such as
through bill of lading or muti-modal or combined transport bill of lading. It also fuelled an
expansion of freight forwarders who not only provided packing services, warehousing,
customs clearance etc, but also undertook transport arrangement across international frontiers
involving several carriers. It is not regulated by an international convention hence there is a
“legal chaos” as to whom to sue in case of delay in delivery, loss or damage to goods, where
to sue, time limits for initiating action, or the basis and extent of the forwarder’s or carrier’s
liability.
It is issued by the combined transport or multi-modal transport operators. Often, a
through bill of lading is issued and services of sub-carriers like railways or road transport are
hired by the operators of combined transport.
It is reported that within the London Group of P & I Clubs, three of them have formed
the through Transit Marine Mutual Assurance Associations Ltd. These Clubs cover the extra
liabilities assumed by the combined transport operators, arising from door-to-door movement
of cargo.

The Main Differences between the Hamburg Rules and the Hague Rules
Hamburg Rule a major victory for the developing countries. Their victory, however,
was a function of the decision making process that gave rise to the new rules which affected
the language adopted in the new rules. In the Hague Rules, delegates resolved conflicts
arising between different interests through language that attempted to capture the
compromise necessary to resolve the disagreement. There was no political constraints thus
were able to craft rules that the delegates themselves could engage in economic bargaining
over the language of the rule. Whereas, the Hamburg Rules, by contrast, the delegates
resorted to ambiguous language as a means of capturing consensus when substantive
compromise were unattainable.
The Hamburg Rule is firmly built on realities in modern shipping and thus is in
harmony with the needs of modern trade. When the Hague Rules were drafted many of the
problems such as containerization, combined transport, custody at intermediate transfer
points, persistent worldwide inflation, wide spread use of non-negotiable contracts of carriage
had not arisen.
The basic difference is that the Hague rule imposed carrier to exercise due diligence
to maintain seaworthiness of the vessels. The rule provided list of exemption, including
negligence in navigation and management of ship. The ship-owner had sufficient bargaining
power to obtain numerous exemption to the general liability rule. In the 1960-70s the
developing countries spearheaded efforts to reallocate the risks first through UNCTAD and
then through UNCITRAL. Here the developing countries also agreed that the basic principle
of fault should be simply stated and that the rule for the burden of proof and exception to
liability should be considered separately.
Scope and Application
Hamburg Rule has a broader scope of application because it applies to all contracts of
carriage by sea (Art 1(6) and Art 2) and not merely bill of lading. It governs the rights and
obligation of the parties to the contract of carriage regardless of whether or not a bill of
lading was issued because increasingly these days more are more cargoes are being carried
under non-negotiable transport documents called the “sea waybills” rather than under bill of
lading. Non-negotiable instruments avoid certain problems that have arisen in connection
with the use of bill of lading, such as the arrival of the goods at their destination before the
bill of lading reaches the consignee. If the Bill of Lading or any other document evidencing
that the Hamburg Rules would apply to a particular contract of carriage then the application
of the Rules will not depend upon the nationality of the ship, the carrier, the shipper, the
consignee or any other interested person. It does not apply to charterparty unless a bill of
lading is issued under the charterparty.
Whereas the Hague Rule applied only to Bill of lading issued in a contracting State.
Hague Rules and Hague Visby Rules do not apply when a transport document other than a
bill of lading is issued in connection with the carriage. For letter of credit or resale during
transit does not require negotiable documentation, hence the Hamburg rules give more
protection to third party purchasers.
 Moreover, the Hague Rule applies only to outbound shipments i.e. at the place of
loading. In shipments from a non-Contracting State to a State that has adopted the Hague
Rules, the consignee in the Contracting State who receives the damaged goods often needs to
attach the ship or assets of the carrier in its own state. This problem is over come by article 2
of Hamburg Rules which makes the convention applicable either “the port of loading or port
of discharge” is in a contracting State. This is considered to be most important advances
made by the Hamburg Rule.
Catalogue of Exemptions
The Hague Rule provides for fault based liability under Article 3 at the same time
Article 4 provides for a list of exceptions, came to be known as the ‘Catalogue of
Exemption’,4 in which “neither the carrier nor the ship shall be responsible. It was noted that
these exemptions constituted an attempt to set forth circumstances in which the carrier would
not be considered to be at fault, and consequently these exceptions had produced uncertainty
and litigation.
One of the most controversial exception in the Hague Rule is that “neither the carrier
nor the ship shall be responsible for loss or damage arising or resulting from: act, neglect, or
default of the master, mariner, pilot or the servants of the carrier in the navigation or in the
management of the ship”. Honnold (1993) questions “would the carrier be immuned from
liability if the ship is negligently put on the rocks so that the hull cracks and sea water
destroys cargo?”. This has led to uncertainty, litigation and divergent decisions by various
courts in different jurisdictions.
Moreover the Hague Rule contains no unified burden of proof system. Some
provisions have their own express burden of proof rules but for the most part the convention
is silent on the matter. As a result, courts have developed several different burden of proof
rules. Article 5(1) of Hamburg Rule provides that if the shipper proves that the occurance that
caused the loss took place while the “goods were in the carriers charge”, the carrier is liable

4
Article 4(2) of Hague rules lists out exemptions: “Nether the carrier nor the ship shall be responsible for loss or
damage arising or resulting from: a) Act, neglect, or default of the master, mariner, pilot or the servants of the
carrier in the navigation or in the management of the ship b) fire, unless caused by the actual fault or privity of
the carrier c) perils, danger and accidents of the sea or other navigable waters d) Act of God e) Act of war f) Act
of public enemies g) arrest or restraint by princes, rulers or people or seizure under legal process h) quarantine
restrictions i) Act or omissions of the shipper or owner of the goods agents or representative j) strikes or
lockouts or stoppage or restraint of labour from whatever cause, whether partial or general k) riots and civil
commotions l) saving or attempting to save life or property at sea m)wastage in bulk or weight or any loss or
damage arising from inherent defect, quality or vice of the goods n) insufficiency of packing o) insufficiency or
inadequacy of marks p) latent defects not discoverable by due diligence; q) any other cause arising without the
actual fault or privity or servants of the carrier but the burden of proof shall be on the person claiming the
benefit of this exceptions to show that neither the actual fault or privity of the carrier nor the fault or neglect of
the agents or servants of the carrier contributed to the loss or damage.
unless it proves that the loss did not result from the carrier’s fault or neglect. The Hamburgs’
unified approach provides an enormous gain in clarity, predictability and international
uniformity (Honnold, 1993).
In those days cargos was stowed in the ships and were not carried on the deck, if it
was carried it was carried “at shippers’ risk.” Hague Rules excludes live animals and cargo
carried on deck from the definition of “Goods”. 5 The modern transport techniques involve
stowing of containerized cargo on the deck.
The only excemption allowed under the Hamburg Rule is that it excuse the carrier
from loss caused by “measures to save life or “reasonable measures” to save property at sea.
Period of Responsibility
The liability regime of the Hague Rule and the Hague Visby Rules commences when
the goods are loaded unto the ship and ends when they are discharged from the ships i.e.
‘Tackle-to-Tackle’6. This means that the carrier’s liability under the Hague Regime does not
apply if the damage or loss occurs while the goods are in the custody of the carrier prior to
loading or after discharge. It left a legal vacuum before and after the tackle-to-tackle period,
hence no party could be held responsible for damage to cargo during such period although the
carrier had “charge” of the cargo before and after the voyage. This approach reflected early
pattern in which the shipper brought goods to the dock as the ship was ready to load and the
consignee received the goods as they were unloaded.
For many decades it has not been feasible at busy ports for cargo owners to bring their
cargo to the side of the ship when the ship is prepared to load this cargo, or to receive cargo
as it is deposited on the pier. Instead, the shippers usually deliver the goods to the carrier’s
warehouse before the ship is ready to load; similarly at the port of discharge the carrier often
has custody of goods for a substantial period between unloading and delivery to the
consignee.
In modern shipping practices carriers often take and retain custody of goods in port
before and after the actual sea carriage. It has been estimated that most loss and damage to
goods occurs while the goods are in the freight yard, due to weather theft etc.
Hague rules were outdated even in 1924 itself because the Harter Act of 1893 made
the carrier liable for negligence in the “custody, care or proper delivery” of cargo “in its

5
Article 1 of Hague Rule: (c) “Goods” includes goods, wares, merchandises and articles of every kind
whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck
and is so carried.
6
Tackle-to-tackle is the period from the time when the goods are loaded on to the time when they are discharged
from ships.
charge”. As a result there were conflicting international rules governing carriers’
responsibility during this important period while the carriers have custody and control of the
goods.
In order to ensure that such loss or damage is the responsibility of the party who is in
control of the goods and thereby best able to guard against that loss or damage, Art. 4 of the
Hamburg Rule hold the carrier responsible while the goods are in his charge at the “port of
loading, during the carriage and at the port of discharge.” The Hamburg Rule prescribes a
mandatory liability regime which covers the period from the time the carrier takes the goods
in charge at the port of loading until the time the carrier delivers the goods at the port of
discharge. Thus the Hamburg liability regime extends beyond the actual carriage; to the
extent the carrier keeps the goods in its charge in the port before they are loaded and after
they are unloaded.
Hamburg Rule approach adopts the same rule that is applicable for other modes of
transportation embodied in international conventions for carriage by road, rail and air.
“Nautical Fault”
The Hague Rules provided that the carrier is liable for loss or damage resulting from
his failure to exercise due diligence to make the ship seaworthy, to properly man, equip and
supply the ship or to make its storage area fit and safe for the carriage of goods, a long list of
circumstances exempt the carriers from this liability. These provisions are based upon
exemption clauses that commonly appeared in the bill of lading when the Hague Rules were
adopted in early 1920’s. These exemptions free the carrier from the faulty navigation or
management of the ship.7 As a result of these exemptions, the shippers bear a heavy portion
of the risk of loss of or damage to his goods.
The justification for these ‘nautical fault exception’ were : the cargo was carried in
wooden sailing ships its course were subject to winds, charts were not available, if available
were not reliable, no navigational aids were available, ship-owner could not communicate
with the ships at sea.
Those were the days of “wooden ships and iron men” it was reasonable to think of
overseas trading as a dangerous joint venture in which ship-owners risked the ship, the
captains and crews risked their lives and shipper risked their goods (Ram, 1968).

7
In Air transportation, the original Warsaw Convention 1929 also exempted the carrier from liability for
negligent pilotage, or negligence in handling of aircraft, or in navigation. This provision was abolished by the
1955 amendment to the Warsaw convention. As per the amended Convention “the carrier is not liable if he
proves that he and his agents have taken all necessary measures to avoid damage or that it was impossible for
him or them to take such measures.”
 With today’s highly sophisticated devices real faults in navigation are rare, despite
that why the carriers cling to the immunities provided by the Hague Rules is intriguing.
Even the cargo insurers were opposing the elimination of carriers’ navigation and
management immunities because more number of risk covered would require higher
premium. If the nautical fault exemption is withdrawn then the insurers stand to loose out on
premium payable. Honnold (1993) delights that this testifies the merits of the Hamburg Rule.
Other mode of transport such as air, road and rail do not provide for such exemption from
carrier’s liability, there the insurers have accepted such kind of liability regime.
The inability of the ship-owner to communicate with and exercise effective control
over his vessel and crew during long voyage at sea, and the traditional concept of an ocean
voyage as a joint adventure of the carrier and the owners of the goods. It was also said that
the Ocean carriers during the voyage does not control navigational operations by the captain,
pilot and crew. However the subsequent developments in communications and the reduction
of voyage times have rendered those justifications obsolete. The liability scheme has no
parallel in other modes of transport (road, rail and aviation).
The Hamburg Rules effect a more balanced and equitable allocation of risks and
responsibilities between carriers and shippers. Liability is based on the principle of presumed
fault or neglect. That is, the carrier is liable if the occurrence that caused the loss, damage or
delay took place while the goods were in his charge, and he may escape liability only if he
proves that he, his servants or agents took all measures that could reasonably be required to
avoid the occurrence and its consequences. It eliminates the exemption from liability for loss
or damage caused by the faulty navigation or management of the ship. The liability of the
carrier under the Hamburg Rules corresponds with the liability imposed upon carriers under
international conventions governing carriage of goods by other modes of transport, such as
road and rail.
Financial limits of liability
Under the Hague rules the financial limitation to cargo damages gave rise to great
trouble because the wording in the original convention limited the liability of the carrier ‘to
£100 per package or unit’. As the value of the £ sterling changed on foreign exchange market
a conflict of law arouse. Some countries decided that the limit was the present value of £100
in gold in 1924. The United kingdom interpreted the phrase literally, and awarded £100, even
though sterling had fallen in value. 8 A further question was what constitutes a package or unit
8
The compensation of £100 per package awarded in the UK courts became so different from the gold value
awarded in other courts. Hence, all ship-owners and shippers who are members of British Maritime Law
Association agreed between themselves to increase this limitation to £200 by and agreement on 1st August 1950.
which was not define in the Hague Rules but had been subject to interpretation in the courts;
in a case an entire locomotive was held to be a unit and was awarded $500.9 The Container
revolution added new dimension to the problem its most extreme form, the courts might be
asked to call a container a package, even though its contents manifestly exceed £100 in value.
This problem is overcome by the Hamburg Rules which recognized two cargo units
for settling liability: 1 package or shipping unit and 2. limit based on weight of the cargo,
whichever is higher.
The sterling became fluctuating currency, inflation in many countries and currency
devaluation eroded the value of Hague’s monetary limit. This provided yet another ground
for forum shopping.
Under Hamburg Rules, the liability of the carrier is limited to 835 SDR per shipping
unit or 2.5 SDR per kilogram of the goods whichever is the higher which is equivalent to the
limitation prescribed in the 1979 protocol to the Hague, that provision was incorporated into
Hamburg.10
The Hague and Hague-Visby Rules specify the financial limits in monetary units of
gold value. In practice, however, the liability limits differ widely as a result of differing
methods of conversion of those monetary units into national currencies. In some States the
market value of gold is used as the standard of conversion while other standards are used
elsewhere. Where the market value of gold is used, the resulting limits of liability are
considerably higher than the limits specified in the Hamburg Rules. The 1979 Protocol to the
Hague-Visby Rules sets the limit at 666.67 SDR per shipping unit or 2 SDR per kilo-gram of
goods, whichever is the higher.
With the advent of containerization the cargo claim was substantially reduced, the
cargo usually get damaged while loading, stowing, unloading manually. By eliminating
manual handling of packages by longshoremen eliminated cargo damages considerably.
Moreover the containerization brought about a shift in the liability regime. Under the
conventional stowage system the carrier was responsible for the damage. Here the shipper is
responsible for properly stowing the individual cartons are packages in the metal containers
and at the destination the consignee is responsible for unloading of the cartons or the
packages (Simon, 1974).
Multimodal transport and Trans-shipment

9
Isbrandtsen Co. v. United States, 201 F.2d 281 (2d Cir. 1953). See Honnold 1993.
10
Warsaw Convention, for air transport, provides for 250 francs per kilogram.
 The early pattern of transport along the agreed routes has become obsolete by the
container revolution. The earlier law relating to carriage of goods by sea (both Hague and
COGSA) prohibited transshipment; the cargo is to be carried throughout the voyage in the
same ship, unless special circumstances make it impossible for the carrier to carry the goods
in the same ship to the port of discharge, and in the absence of express provision to the
contrary in the contract of affreightment (Ridley, 1978 p. 141). Trans-shipments were made
at owners’ risk.
Collection and distribution is arranged at trans-shipment centers which imply that the
shipment do not reach destination port straight away, the cargo goes through various ports
before they actually reach the destination port. The Hague Rule do not address problems that
arise from trans-shipment which lead to uncertainty and conflicting rules in various
jurisdiction along the cargo route. The owner of the damaged cargo may not be in apposition
to ascertain the wrong-doer and hence he might have to sue all the carriers and the cargo
handlers in far-flung jurisdiction.
The Hamburg Rules is built on solutions developed long ago by rail, road 11 and air
transport regime.12 Hamburg Rules deals with the problem of transshipment by separately
dealing with the responsibility of “contracting carrier”13 and “actual carrier”14. The Hamburg
Rules provide (Article 10(a)) that the contracting carrier remains responsible for the entire
carriage even though whole or part of the carriage is entrusted to another carrier—the
performing carrier or the actual carrier.
The 1978 Hamburg Rules was built on the existing rules developed in the road, rail
and air transport. Container revolution led to transport arrangement by liniking various modes
of transport—road, rail and air. The Conclusion of Hamburg Rule made it possible to
conclude International Convention on Multimodal transport in 1980 because for a long time
the preparation of uniform rule for inter-modal transport was stalled due to disparities
between the ocean carriers and other modes of transport such as rail, road and air.15
Delay

11
International Carriage by Road (Geneva), 1956 also known as C.M.R. Convention—Convention de
Marchandises par Route). Under the contract of goods by road, in the absence of any agreement to the contrary,
it is the duty of the carrier to deliver the goods to the consignee. The carrier is not absolved from liability till the
goods reach the consignee; he may deliver the goods to the second carrier or agent to be ultimately delivered to
the consignee. Neither the second carrier nor the agent is held responsible (Jasper Ridley, 1978 pp.43-68)
12
International Convention concerning Carriage of Goods by Rail 1970 (also known as C.I.M. Convention—
Convention Internationale de Marchandises) came into force in 1975. (Jasper Ridley, 1978 pp.69-77).
13
One who makes the contract of carriage of goods by sea.
14
One to whom all or part of the performance of the carriage has been entrusted, they are also called
“performing carrier.”
15
The terms “multimodal” “inter-modal” “trans-modal” are used to mean the same.
 Hamburg rules provide for mandatory liability for delay in delivery of goods. The
financial limit for such liability is two and a half time the freight payable for the goods
delayed. The Hague regime does not provide for liability for “delay” but it provides for
“deviation”. Hamburg specifically permits a recovery for loss caused by delay. This is a new
concept with provisions that might require extensive interpretation by the courts.
Seaworthiness
To prove seaworthiness, the Hamburg Rule requires the carriers that the ship-owner
and his servants or agents took all reasonable measures that could reasonably be required to
avoid the occurrence and its consequences.
Burden of Proof in case of fire
The Hamburg Rules have place the burden upon the cargo interests to prove “that the
fire arouse from fault or neglect on the part of the carrier, his “servants or agents” or that the
carriers agents failed to take “all measures that could reasonably be required” to extinguish
fire (Art 5 and Art 4 (a) (i)-(iii)).
Jurisdiction and Arbitration
The Hague regime does not provide for rules on jurisdiction and arbitration and the
parties were free to make contract as they pleased. Hence this aspect was left to be governed
by a clause in the standard bill of lading, which invariably required any claim to be brought at
the “carriers place of business”. This caused diverse interpretation of Hague Rule and many
courts invalidated the carriers forum clause in the bill of lading which lessened the liability of
the carrier and placed heavy litigation cost on the consignee. As a consequence there was an
agreement entered between the shipper and ship-owner—the 1950 British Maritime Law
Association Agreement—which provided that the members of the agreement will not bring
any action in any court except those of UK (Ridley, 1978 p. 202). Such an agreement and a
clause in the bill of lading are unfair for the cargo owner. Cargo loss or damage is not
discovered until the cargo is unloaded at the port of destination, which may be thousands of
miles away from the place of business of the carrier. This places the burden on the claimant
to transport the evidence to a distant foreign tribunal and most times the heavy cost of
litigating in a distant forum may make it impractical to press claims.
The Hamburg rules have mandatory provisions on jurisdiction and arbitration;
accordingly the claimant may institute action at one of the following places: the place of the
defendant; the place where the transport contract was made; the port of loading; port of
discharge; or any other agreed place.
Electronic Documents
 Hamburg Rules does not make specific mention of electronic documents but it
provides that “the signature on the bill of lading may be in … electronic means” (Art 14(3)).
the electronic signatures are generally attached to electronic document. That means that the
Hamburg Rules accommodates paperless bill of lading (Carr, 2005).
Shippers Responsibilities
Hague Rules just tries to limit the liability of the ship-owner but do not place any
responsibility on the users of ship i.e. the cargo exporter. Hamburg Rules provides for
shippers responsibilities: the shipper is expected to provide accurate particulars of the goods
shipped by him i.e. marks, numbers, weight, and quantity in the bill of lading. If inaccurate
details are provided as a result of which the carrier suffers losses, the shipper must indemnify
him for the losses suffered. The shippers duty to indemnify subsists even if the bill of lading
is transferred to the consignee (Art 17). In case of dangerous cargo he should inform the
carrier of the dangerous nature of the goods and the precaution needs to be taken. If they
become actual danger to life and property the carrier may unload, destroy or render them
innocuous, and the Hamburg Rules do not place him under obligation to pay compensation
except where there is obligation to pay general average (Art. 13(4)).
Conclusion
The Hague Rules were negotiated to bring about uniformity in the maritime
transactions relating to bill of lading but now there are several competing Rules are available.
Some States are party only to the original Hague Rules, while some others have adhere to the
“Hague-Visby Rules” and very limited number of States are party to the SDR protocol which
make it difficult to come to a conclusion whether the shipment was subject to Hague Rule
alone, Hague-Visby Rule or the Hague-Visby plus the SDR protocol or the Hamburg Rules.
Though the Hamburg rules came into force in 1992, it may not have achieved the
desired impact so to say, less than 2% of the US trade involves Hamburg countries and the
American vessel interest is significant enough bloc to impede its adoption by the US
Congress (Chandler, 1993). Chandler (1993) argues that substantive uniformity is attainable
only when various participants arrive at the consensus, the proponents of Hamburg rules
failed to recognize reaction of the ship-owners that their rights have been compromised
without receiving anything in return and they resented having one sided solutions imposed
upon them and resisted such an action. But Fredrick (1991) says though the developing
countries asserted to reform antiquated in-egalitarian Hague Rule provisions, their delegates
were reluctant to impose by their numerical superiority an international regime unacceptable
to the industrial countries, consequently certain Hague Rule principles that are arguably
disadvantage the commercial interest of the developing countries are still present in the
Hamburg Rule. It seems there is no way out of this impasse.
The political origins of the instrument have also played a dominant role in its
dismissal as an undesirable convention (Carr, 2005).