Reference Information

Reference information on the types of overseas transportation (Incoterms, Merchant Shipping Conventions)

International overseas transportations is regulated by the following three conventions:

- The Hague Rules ("International Convention on the Unification of Certain Rules relating to Bills of Lading", 1924, Brussels);
- Visby Rules ("Protocol of Amendments to the International Convention for the Unification of certain Rules of Law relating to Bills of Lading", 1968, Brussels);
- The Hamburg Rules ("United Nations Convention on the Carriage of Goods by Sea", 1978, Hamburg).

The Hague Rules - is the oldest and most respected of international conventions. This set of rules outlines the boundaries of the responsibility of shipowners for transportation of goods under bills of lading. According to The Hague Rules, the carrier is obliged to:
- supply the vessel with everything necessary for sea passage;
- organise crew;
- issue a bill of lading on a separate blank-form;
- ensure of the suitability of cargo holds for the reception, storage and transportation of cargo;
- gently handle the load at all stages of the work.

At the same time, it is indicated that the carrier cannot be released from liability for damage caused to the cargo during transportation. Any additional clauses in the contract providing for the removal or reduction of this liability are void. The carrier may be exempted from liability for losses only in case of events not depending upon him: military actions, quarantine restrictions, hidden shortcomings of cargo, etc.

Visby Rules - this convention is a revised and partially amended version of The Hague Rules, and is therefore also known as the "rules of The Hague-Visby". The Hague-Visby Rules, for example, specify the possible types of losses and damages that can be incurred by the carrier, and other subtle aspects. Notably, this normative act was not adopted by all countries; many follow the Hague rules in their primary form.

The Hamburg Rules are the third alternative normative act of international maritime private law developed by the UN in an attempt to expand previous rules, clarify them, and update the terminology. Some changes are fundamental: for example, according to the Hamburg Rules, the carrier can be punished if the goods are not delivered on time, which was not the case before. The period of the carrier's liability for the cargo also increased: besides the way to the sea, it was included the reception and delivery of goods.

The Hamburg Rules are valid in following cases:
- the port of reception of cargo is in the country-participant of the convention,
- a bill of lading, a customs consignment note or other documents evidencing the fact of an international overseas transport contract are issued in the State Parties to Convention;
- the contract of carriage is drawn up in direct or indirect accordance with the Hamburg Rules,
- The port where the discharging will be carried out is located on the territory of the State Parties to Convention.

Incoterms - are a set of standardized international rules for the interpretation of the most widely used trade terms in international trade. Incoterms uses four terms that are intended for use in international shipping. Their existence allows for more precise regulation of the arrangement. These are the terms:

- FAS (Free Alongside Ship) - provides for the liability of the seller from the time of the beginning of the overseas transportation to the time when the goods are located alongside the ship at the port of loading. After that, the seller is not responsible for the loss and damage to the goods.

- FOB (Free On Board, "free on board") - provides for the liability of the seller for the goods until they are on board the ship at the approved port.

- CFR (Cost and Freight) - the seller delivers the goods to the ship that carries out the sealift, and also pays for customs clearance and freight. At the same time, the seller is not responsible for damage to the goods during transportation, and all other costs are borne by the buyer.

- CIF (Cost, Insurance and Freight, "Cost, Insurance and Freight") - as with CFR, the seller delivers the goods to the ship that carries the sealift, and also pays for customs clearance and freight. But other than that, he takes on the cargo insurance. The buyer is responsible for risks.