My stock has arrived at its destination, and it’s damaged! Who is responsible for the damage to my goods in transit – my company or the company who transported it?
If you’re transporting goods on a regular basis as part of your business, you may be concerned about possible damage during transportation. And your concerns are valid, as the costs for such losses can become astronomical. Is there a way to determine who is responsible for the damage and to make sure all your risks are covered?
Dispute resolution or litigation for logistics and transport matters where goods are moved by road can be expensive. Goods being damaged during transportation can affect the seller, buyer, and private carrier moving the goods. That’s why it is important to understand who is responsible for what, so that disputes can be resolved quickly.
To understand where responsibility lies in South Africa and how to mitigate or cover the risks involved, it’s important to understand how damage occurs while stock is being transported or shipped. The extent of loss or damage you can experience depends on the product, the mode of shipment, and the destination. Even so, there are some constants we can delve into.
What Causes Damage to Goods in Transit?
While there are many ways your goods could sustain damage while being driven and shipped to its endpoint, there are a few constants to be aware of. Knowing what these are can help us find ways to reduce the risks of damage.
1. Sudden Impact.
When the vehicle or container holding the product experiences a sudden impact, the product can sustain damage or breakage. This makes logical sense. The thing that might be surprising is how common this is.
Yes, road accidents are sudden impacts, but as goods are transitioned from one place to another, they move between vehicles. They go from one transporter to another. In the process, they can typically experience more than a few sudden impacts, simply while being moved or handled. This is also referred to as fatigue failure.
2. Prolonged Vibration.
This type of event is one of the most common and often overlooked types of causes. Products may sustain damage if they are not securely packaged simply due to the sustained vibrations of truck engines, vehicles, and rocking ships. Vibrations are difficult to avoid when transporting goods.
3. Poor Load Stability or Poor Pallet Stability.
This kind of damage often occurs with reckless driving like speedy cornering or by stacking products or crates up too high. As a result, products can be crushed or may burst from the pressure. Crates and products may fall off or topple and break when the vehicle corners or during other transit rigours.
With the average e-commerce order having around 10 touch points prior to delivery, it is essential your packaging can withstand the rigours of your chosen courier network.
4. Abrasion
This type of damage describes damage happening because items are rubbing against each other, thus abrading. Often, this type of damage occurs to printing and polished or painted surfaces. Products can rub against each other or against containers, pallets, and other surfaces while being moved. The product may not be shattered, but the damage could still make it inadequate for sale.
How Can Such Shipping and Transport Damage Impact My Business?
It’s easy to understand that the costs of such damage can quickly add up and lead to massive financial losses. Businesses can damage and lose relationships with retailers and end users of their products when trust is broken or the reliability of the quality of products comes into question. It’s important that businesses mitigate the risks involved as much as possible.
What Types of Damage Can Occur to My Goods in Transit?
Aside from the regular types of damage through abrasion, sudden impact, and more, events on the road can have other elements to consider and get insurance for. For example, if the truck is in an accident, it can affect the goods being transported, vehicles driven by other road users, injuries and losses to pedestrians or members of the public, and even the road infrastructure.
Then there are indirect losses to consider, such as those of an economic nature due to the delay of delivery of the products or goods being moved. Sometimes, it isn’t possible for every type of loss to be covered, but a wise business owner will ensure as much as possible is covered by their insurer.
You can find out from a goods-in-transit insurance company what their standard policies do and don’t cover. Some goods in transit policies include a clean-up of the area where the accident occurred, including remediating the environmental impacts of any leaks or spillage.
Who is Responsible if it is Damaged While Being Transported?
Currently, South African legislation doesn’t clarify who is ultimately responsible. There are, however, steps legislated that require certain actions by parties involved. Transport operators must be able to produce evidence of insurance. Otherwise, the consignor and consignee do not have to agree to transport goods with them or agree to accept the transported goods.
The type and extent of insurance isn’t mentioned, and often confusion can come in here. Since each insurance type and policy is unique, there can be gaps in what is and isn’t covered. Then there are amendments stating that transport operators need to have a written declaration setting out how goods will be transported and the nature and quantity of such goods.
The papers the operator needs to have on hand should also include a written agreement between the consignor and operator about how loading and other parts of the process will be executed and who will be responsible for which parts. Companies are prohibited from concluding a contract if an operator’s vehicles are overloaded. The consignor is also obligated to keep records of each load transported from their premises.
The resolution of each damage case will depend on the events and how the parties involved dealt with areas they are responsible for. If a driver drives irresponsibly and damages goods through recklessness, the transportation company can be found responsible. If the product design has a flaw or was packaged inadequately, the consignee may be held liable if products arrive damaged.
While transporting companies often claim their contracts exempt them from the liability for such damaged goods, the Consumer Protection Act states they cannot contract themselves out of such obligations. The CPA requires them to “exercise the degree of care, diligence and skill that can reasonably be expected of a person responsible for managing any property belonging to another person”. If the damage occurred because they neglected to do so, they can be held liable.
It is therefore important that any party involved get adequate insurance for all their possible risks, to avoid disastrous consequences should goods in transit suffer damage. Transit damage reduction can take many forms, from better agreements between the parties to health and safety conditions and other conditions of cover. Electronic devices can be installed to ensure a manageable rate of vibration or that crates are stable and secure.
Can Goods-in-Transit Insurance Help?
Yes, stock in transit cover or goods-in-transit insurance can be very useful for product damage caused while shipping or transporting goods. It is a good idea for the consignor, or sender of the goods, to get reasonable cover for the risks they are exposed to in the circumstances. For cargo owners and carriers, goods-in-transit cover and carrier’s liability insurance along with business car or fleet insurance will be important.
You can also check your insurance policy to make sure your transit damage risks are covered as far as possible. If you’re looking for good Transit Insurance in South Africa from a reputable Insurance provider, simply fill in our online form. You can put aside stress due to the risk of damage for good, knowing you are covered for damage to your goods in transit.
DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.
Sources: Santam; businesstech.co.za;
