When goods go missing during overseas delivery, how should liability for the loss be determined?

Case Review

In July 2019, Ding, based in Hefei, China, was preparing for a major business opportunity. He had carefully selected a batch of high-quality surveillance cameras to be shipped to an overseas warehouse in Australia, in anticipation of the upcoming sales peak. To ensure safe and timely delivery, Ding entrusted the entire process, including transportation, customs clearance, and delivery, to a professional freight forwarding company, Company A.

During the negotiation process, Ding received a freight quotation from Company A. The quotation included a clause stating that in the event of loss or customs seizure during transport, Company A would compensate at a rate of RMB 40 per kilogram or RMB 1,000 per cubic meter, whichever applied, with the total compensation not to exceed the declared value of the goods. Freight charges would not be refunded.

In October 2019, Ding handed over the goods to Company A, and the shipment was delivered to a port in Australia. For the final leg of delivery, Company A contracted with local Australian logistics provider TOLL.

Just as Ding was awaiting confirmation of delivery to the overseas warehouse, troubling news arrived. The shipment had gone missing during delivery. Alarmed, Ding contacted Company A, seeking an explanation and a reasonable compensation plan. To his disappointment, Company A neither provided a credible explanation for the loss nor showed any willingness to assist in locating the goods.

How would the court determine the freight forwarder's liability for compensation?

Court Decision

After trial, Guangzhou Maritime Court found that Company A acknowledged TOLL as its local delivery agent in Australia but failed to provide a reasonable explanation for the loss of the goods during the final delivery stage. Furthermore, Company A did not actively assist Ding in verifying with TOLL whether the goods were indeed lost and at which stage. The Court held that Company A had failed to fulfill its duty of care as a freight forwarder and was clearly at fault, and thus should bear liability for the cargo loss. As for Company A's defense invoking a limitation of liability clause, the Court found that Company A failed to produce evidence proving it had provided Ding with the quotation containing such limitation or exclusion clauses. Even if the quotation had been delivered, it constituted a standard clause drafted by Company A. As Company A admitted it did not provide clear explanations of the quotation, such a clause could not be deemed part of the contract under Paragraph 2 of Article 496 of the Civil Code of the People's Republic of China. The first-instance judgment ordered Company A to compensate Ding RMB 33,600 for the actual value of the goods and to refund the freight charges of RMB 1,250. Company A appealed, and the Guangdong High People's Court upheld the original verdict in the second instance.

Key Significance

In cross-border e-commerce logistics, it is common for logistics providers to issue pre-drafted quotations to clients, including limitation of liability clauses such as "compensation limited to three times the freight charge" or "maximum compensation of RMB 40 per kilogram." These clauses are standard clauses, which "exempt or alleviate the liability of the party providing the standard clause". When disputed, if the logistics provider cannot prove it fulfilled its duty to call the other party's attention to or give explanations of the clause in a reasonable manner, such a clause will not be considered part of the contract and thus have no legal effect. This case correctly determined the validity of the limitation of liability clause, striking a fair balance between the interests of cross-border e-commerce sellers and logistics service providers. It contributes to the legal regulation of the cross-border logistics industry and promotes its high-quality development.