A Stevedore Hired by Both the Shipper and Carrier Is Still Protected by Bill of Lading That Was Never Issued

November 25, 2013

A stevedores company was hired by the shipper to unload 143,200-pound boiler from a railcar, store the boiler until the ship arrived, and then move the boiler to shipside for loading. The stevedore also had an exclusive contract with the ocean carrier.

The stevedore company received the boiler and stored it. When the ship arrived, the stevedore loaded the boiler onto the stevedore’s trailer and moved it to the vessel’s side. While maneuvering the trailer into proper location for loading, as directed by the vessel’s port captain, the boiler fell off the trailer and sustained significant damage. The shipper sued the stevedore for $284,415 in damages, as well as fees, interest and cost.

The trial court held that the stevedore’s liability was not limited by the U.S. Carriage of Good by Sea Act (COGSA) because the stevedore at the time was not acting as the agent of the ocean carrier. It found the stevedore was solely liable for the loss.

On appeal, the Fifth Circuit Court of Appeals found that the agency dispute had no bearing on the outcome of the case because the bill of lading “unambiguously resolved the question” of limiting the stevedore’s liability.

The bill of lading extended COGSA’s coverage to include the period before loading so long as the goods are in the actual custody of the carrier or any “servant or agent.” Moreover, the bill of lading defined “servants or agents” as including inter alia, the stevedores. Therefore, the $500 COGSA package limitation “necessarily applied.” It should be noted that no bill of lading was issued. However, the Fifth Circuit noted that when circumstances intervene to prevent issuance of a bill of lading, the shipper is still bound by its terms, which were known by the shipper. (Rafinasi v. Coastal Cargo Company Incorporated).

This article is from Montgomery McCracken’s Fall/Winter 2013 Maritime and Transportation Newsletter.