Support for the Rotterdam Rules

As I mentioned in a post earlier this week, the so-called Rotterdam Rules are gaining traction in the US as industry group and trade associations voice support for the UN Convention designed to replace the international hodgepodge of laws regulating the carriage of cargo through ocean shipping.  In the US, the Carriage of Goods by Sea Act, or COGSA has been the law since 1936 with nary an amendment.  According to the Journal of Commerce, on May 5, the National Industrial Transportation League ("NITL") or "NIT League" voted unanimously in support of the new rules.  This is hardly a surprise as the rules are well favored by most shippers and counsel for the NIT League stated as much during her remarks to the Maritime Law Association of the United States during their debate and subsequent vote of support on May 1.  According to the article:

“The development of compatible worldwide standards applicable to the loss and damage of maritime cargoes is long overdue,” said Mark Maleski, NITL chairman and supply chain logistics director for retailer J. C. Penney.

Uniformity and consistency are notably lacking in the liability rules governing maritime shipping today, said Peter Gatti, executive vice president of the NITL, which represents some 700 U.S. companies involved in domestic and international transport.

Also, the current U.S. law, the Carriage of Goods at Sea Act, hark back to a time when cargo was shipped in boxes, crates and bags, rather than on pallets or in containers.

COGSA is the U.S. law enacting the “Hague Rules,” an international convention dating to 1924. “We all know the world has changed significantly since that time,” Gatti said.

“The Rotterdam Rules will reflect current shipping practices, contain significant improvements over existing cargo liability conventions, promote harmonization among trading partners, reduce legal obstacles and will allow shippers, carriers and third parties to customize their contracts to meet their commercial needs,” he said.

A push for congressional action will be forthcoming and the major question will be whether action takes the form of a submission of the Convention by President Obama for the advice and consent of the Senate or whether domestic legislation is introduced as a means of adopting the rules.  The case for the former suggests that the principles of international uniformity are so important that the US should adopt the Rules as drafted.  The latter would provide opportunity for various trade groups and lobbyists to push for changes to the international rules, the result of which may be better for some special interests but certainly worse for the furtherance of the principle of uniformity providing certainty to shippers, consignees and carriers the world over. 

We will continue to track developments and have established a separate category for tagging these posts.  I hope this site can develop a significant discussion of the Rotterdam Rules, so please let me hear from you.