A proposal to revise the US Carriage of Goods by Sea Act (COGSA) is expected to be introduced into the US Senate shortly. The proposed revision, which the Maritime Law Association (MLA) of the United States has worked on for a number of years, is strongly opposed by BIMCO and other international shipowners’ organizations.
Proponents of the US COGSA argue that the revision is necessary to bring the United States in line with other jurisdictions as regards the interpretation of the Hague and Hague-Visby Rules. However, BIMCO fears that unilateral action on the part of the United States will seriously undermine international efforts to harmonize international liability regimes governing carriage of goods by sea.
In order to heighten the pressure against the proposed revision of the US COGSA, CENSA, BIMCO, ICS, the International Group of P&I Clubs and Intertanko have sent a joint letter to the National Industrial Transportation (NIT) League, a major proponent of the US COGSA. The same letter has been sent to Senator Hutchison, Chairperson of the US Senate Committee on Commerce, Science and Transportation.
The text of the letter reads as follows:
“The NIT League have suggested that the undersigned organizations, and other opponents of the MLA proposal to revise COGSA, should try to resolve their differences with respect to that proposal. We believe, however, it is not possible to resolve those fundamental differences in the context of the MLA proposal; instead we invite the NIT League and other proponents of the proposal to join us in a different course of action to modernize cargo liability laws.
COGSA may need revision and updating. But we firmly believe that a truly international industry like shipping requires international solutions in order to continue to serve the needs of an increasingly globalized economy, to the benefit of all users of shipping services and ultimately the consumers. Our associations, which represent the overwhelming majority of the international shipping community, and which also include US carriers engaged in international trade, are convinced that unilateral enactment by the US of the sweeping changes in the MLA COGSA proposal would work to the detriment of the international ocean carrier, shipper and intermodal transport communities, as it would undermine the predominant approach among US trading partners to cargo liability laws, and thus make it much more difficult, if not impossible, to reach an international agreement to update those laws.
Proponents of the MLA proposal argue that unilateral action by the US is warranted because there no longer exists a common international law of cargo liability. While the current situation is not ideal, the majority of the world’s leading trading nations are applying cargo liability schemes which are based on the so-called Hague or Hague-Visby rules. According to MLA’s own calculations, approximately 80% of the US foreign waterborne trade (measured by value) takes place with nations adhering to these rules. Any unilateral decision by the US to implement cargo liability rules such as those proposed by the MLA would, therefore, put the US further outside the mainstream of its most important and largest trading partners including Canada, Mexico, Japan, the EU and Australia. Consequently, the changes proposed by the MLA would be irreconcilable with, and in some cases contradictory to, the dominant international liability provisions. The resulting lack of comity, legal conflicts and possible counter-measures by other countries would create new barriers to trade - an outcome whose primary victims would be shippers and companies engaged in international commerce, including many NIT League members.
Particularly worrisome are the extraterritorial implications of the MLA proposal as it would regulate not only cargo shipments from the US, but also shipments coming into the US which are regulated by foreign jurisdictions’ cargo liability statutes. In addition, unlike existing international maritime cargo liability instruments, the MLA’s propo