By Leo Ryan, AJOTA major reform of international laws governing the sea transport of goods is in the works, with its slow progress being closely watched by shippers, carriers and freight forwarders.  The United Nations Convention for the International Carriage of Goods Wholly or Partly by Sea, or what has become known as the Rotterdam Rules, has been signed by 20 nations. “It remains to be seen whether it will orphaned as another rejected UN convention like the Hamburg Rules,” comments Tony Young, chair of the Ocean Freight Transport Law sub-committee of the Canadian International Freight Forwarders Association (CIFFA). Young is chief executive and owner of LCL Navigation, Canada’s largest ocean export consolidator. Twenty is the key number for the convention to come into force globally once it has been actually ratified – or formally adopted as national law by at least 20 countries. So far, Canada has not signed the proposed new convention. In a recent press release, Transport Canada, the federal transport department, explained its position in these terms: “While many stakeholders indicated that Canada should sign the Convention in Rotterdam, subject to ratification, there were also many stakeholders who could not support Canada’s signature at this time, and felt that such a step should be considered as and when Canada’s major trading partners have indicated their commitment to ratify the new Convention.” Such countries as the United States, France, Netherlands, Denmark, Spain, Greece, Poland and Norway have signed on. But this has not yet been the case with China, Japan, India and certain member countries of the European Union. Young stresses that many eyes are on the United States, which has announced its intention to update its Carriage of Goods by Sea Act (COGSA), perhaps as early as 2010, with the Rotterdam Rules. Among the critics of the proposed changes is Douglas Schmitt, a Vancouver-based maritime lawyer. He summed up his concerns at a recent conference of Canadian transport lawyers as follows:
  1. Increased uncertainty about contractual limits of liability and other terms, including whether the carrier can limit liability under the Convention or exclude liability if the shipment is a volume contract.
  2. Increased shipper (including freight forwarder) legal liability for delay or failure to give instructions.
  3. Increased costs of litigating cargo claim recoveries due to the greater complexity and uncertainty of the liability regime.