In the logistics sector, the capacity of the contracting parties is very important. It is important to consider whether there is a carrier, paper carrier or freight forwarder. This distinction is important, among other things, with a view to liability and the insurance to be taken out in this context. This blog will consider these three concepts.
Depending on the content of the contract and the services provided in that context, the capacity of the parties can be determined.
You enter into a contract of carriage with a carrier: a contract of carriage of goods whereby one party (the carrier) undertakes to the other party (the sender/customer/forwarder) to transport goods.
The carrier thus commits to transporting goods.
However, the carrier may also outsource its core task (transporting) to another (de facto) carrier, for example, because it has taken on a transport in an area where it does not carry out transports itself.
In addition, there are carriers who do not have any means of transporting goods at all, but do enter into transport contracts. They therefore have the transport carried out by another carrier, which is why we call this carrier the "paper carrier". In a legal sense, the paper carrier is equated with a "de facto" carrier.
In case of outsourcing, the (first) original carrier remains regarded as the (paper) principal carrier under the transport agreement (viewed from the client's perspective).
With a forwarding agent you conclude a forwarding contract. Also referred to as the contract to "have goods carried": the contract by which one party (the forwarding agent) undertakes vis-à-vis the other party (the principal) to conclude one or more contracts of carriage on its behalf with a carrier of goods to be made available by that other party, or to make a stipulation on its behalf in one or more such contracts of carriage.
The freight forwarder's core business is to conclude a contract of carriage with a carrier on behalf of the principal. Thus, a freight forwarder concludes a contract whereby he "arranges for the carriage" or in other words "organises the carriage". Incidentally, a freight forwarder can do more than just organise transport. Think, for example, of customs clearance, storage, distribution and packing and repacking.
Note! If a forwarding agent does carry out the transport himself, he will be regarded as a carrier with all the legal consequences thereof.
Difference between paper carrier and freight forwarder
Carrier of the goods
The difference between the freight forwarder and the paper carrier is that the freight forwarder, when entering into the contract, has made it clear to its principal that it will enter into a contract of carriage with a carrier - and therefore will not carry itself. In the case of a paper carrier, this is not that clear.
As a freight forwarder, it is therefore very important to indicate that you are a freight forwarder (and subsequently do not transport yourself). If you fail to do so, you run the risk of being regarded as a carrier with all the liability consequences that entails.
Both the forwarding agent and the paper carrier do not carry the goods themselves, but instruct a carrier to carry out the actual transport. Thus, the freight forwarder and the paper carrier are similar. However, the legal differences between transport and forwarding are significant, especially in the case of cargo damage.
The carrier is obliged to deliver the goods received for carriage without delay to the agreed destination in the condition in which it received the goods ("good in, good out"). Therefore, if cargo damage occurs during transport or the cargo is stolen, the carrier is, in principle, liable for it.
This is the most important difference with the freight forwarder. In principle, the forwarder is not liable for cargo damage: he only organises the transport. A freight forwarder who is not insured against cargo damage and yet transports the goods himself (and is thus also legally regarded as a carrier) thus runs great financial risks in case of cargo damage.
Want to know more?
Do you have questions about the terms carrier, paper carrier and freight forwarder? Or do you have other questions about transport law? Feel free to contact one of our lawyers.