How to Build a Counterargument When a Carrier Invokes Defenses

When cargo damage occurs and a forwarder or shipper sends a notice of claim or Claim Letter to the carrier, the carrier may respond by denying liability or invoking defenses.

Typical responses include: “the damage was caused by insufficient packing,” “the damage resulted from the inherent nature of the cargo,” “there was no remark at delivery,” “notice was late,” “the loss was caused by perils of the sea,” or “liability is limited under the B/L terms.”

When such defenses are raised, the forwarder should not respond emotionally. Instead, the forwarder should break down the carrier’s position, identify the basis of the defense, and build a counterargument by reviewing evidence, the stage of damage, B/L terms, applicable law, and limitation of liability.

A Carrier Defense Is Not Always a Final Rejection

When a carrier invokes defenses, the forwarder may feel that the claim can no longer be pursued. However, a carrier’s defense is not always the final answer.

In many cases, the carrier is simply presenting possible reasons to deny or limit its liability. Whether the defense is supported by evidence, valid under the B/L terms, and actually applicable to the facts of the accident must be reviewed separately.

Therefore, the first step is not to accept the defense as it is. The first step is to classify the carrier’s argument.

Classify the Carrier’s Defense First

Carrier defenses can generally be divided into three categories.

The first category is a defense based on the cause of damage. This includes insufficient packing, inherent vice, natural deterioration, unclear temperature requirements, or incorrect cargo declaration by the shipper.

The second category is a procedural defense. This includes late notice of damage, expiry of time bar, absence of remarks on the delivery receipt, or loss of opportunity to inspect the cargo.

The third category concerns the scope or amount of liability. The carrier may argue that, even if liability exists, the amount is limited by limitation of liability, Package Limitation, weight-based limits, B/L exclusions, or a Himalaya Clause.

If these three categories are not separated, the discussion becomes confused. The forwarder should first identify whether the dispute concerns the cause of damage, the procedure, or the amount recoverable.

When the Carrier Alleges Insufficient Packing

One of the most common carrier defenses is insufficient packing.

The carrier may argue that the cargo was not packed to withstand international transport, that internal securing was inadequate, that wooden crates or cartons were weak, or that moisture protection was insufficient.

To respond to this defense, the forwarder should review pre-shipment photos, packing specifications, records from the packing company, evidence of previous shipments of similar cargo without incident, and the external condition of the cargo at arrival.

If the outer packaging shows strong impact marks, tears, holes, crushing, or water stains, the issue may not be only packing. External force during transport may also have contributed to the damage.

On the other hand, if the outer packaging shows no visible abnormality and only the contents are damaged, the dispute is more likely to focus on packing, internal securing, or the inherent nature of the cargo.

Therefore, a counterargument against an insufficient packing defense should not simply say “the packing was adequate.” It should specifically address the external condition, damage location, impact traces, securing method, and whether the packing was suitable for ordinary international transport.

When the Carrier Alleges Inherent Vice

Inherent vice means damage or deterioration arising from the nature of the cargo itself.

This issue often arises in claims involving rust, corrosion, mold, discoloration, odor transfer, quality deterioration caused by temperature changes, or natural loss in weight.

When the carrier relies on inherent vice, the forwarder should check whether the damage truly arose naturally from the cargo itself or whether it resulted from an external event during transport.

For example, in a rust claim, the forwarder should check whether rust existed before shipment, whether seawater wetting or condensation occurred, and whether there are traces of water intrusion inside the packing.

The words “inherent vice” do not automatically establish a defense. The starting point of the counterargument is to check whether the cause alleged by the carrier matches the actual damage condition.

When the Carrier Alleges Late Notice

A carrier may also argue that notice of damage was given too late.

In international sea transport, timely notice is important. Apparent damage should generally be recorded at delivery, while concealed damage should be notified within the relevant period after delivery. If notice is delayed, the cargo may be presumed to have been delivered without exception.

However, late notice does not always make every claim impossible. The forwarder should confirm whether the damage was concealed, when it was discovered, whether notice was given promptly after discovery, and whether the carrier still had an opportunity to investigate.

The counterargument should organize the timeline: date and time of damage discovery, date of consignee’s report, date of notice by the forwarder, date photos were taken, and date of survey.

For a late notice defense, a clear timeline is more useful than an emotional objection.

When There Is No Remark on the Delivery Receipt

The carrier may rely on the absence of remarks on the delivery receipt or POD and argue that the cargo was delivered without exception.

In this situation, it is important to distinguish between apparent damage and concealed damage.

If the outer packaging showed no visible abnormality and internal damage was discovered only after unpacking, the absence of remarks does not necessarily mean that the claim must be abandoned.

However, if external damage or water stains were clearly visible at delivery and no remark was made, it may become more difficult to challenge the carrier’s position.

Even in such cases, the forwarder should collect unpacking photos, warehouse receiving records, inspection records, statements from the consignee, and photos inside the container in order to support when the damage was discovered and what the condition was at that time.

When the Carrier Alleges Perils of the Sea

A carrier may deny liability by referring to heavy weather, waves, vessel movement, or perils of the sea.

In responding to this defense, the forwarder should not only ask whether there was bad weather. The key issue is whether the event exceeded the ordinary and foreseeable movement expected in sea transport.

Even if heavy weather occurred, it is still necessary to consider whether there were problems with stowage, lashing, container condition, or carrier-side handling.

The mere existence of bad weather does not automatically mean that the carrier is exempt from liability for the damage. The forwarder should review the survey report, voyage records, stowage condition, lashing condition, container condition, and whether other cargo was also damaged.

When the Carrier Alleges Limitation of Liability

Sometimes the carrier does not completely deny liability but argues that its liability is limited.

In this situation, the forwarder should separate the existence of liability from the maximum amount of liability.

The forwarder should review the number of packages stated in the B/L, gross weight, description of individual units inside a container, whether a declared value was made, and whether there are differences between the House B/L and Master B/L conditions.

In containerized cargo, the way the number of packages or units is described in the B/L can significantly affect the calculation of Package Limitation.

Even where limitation of liability is raised, the forwarder should check whether the calculation basis is correct, whether the applicable law has been properly identified, and whether there is any difference between the House B/L side and the Master B/L side.

Order for Building the Counterargument

A counterargument against a carrier defense should generally be built in the following order:

• Classify the reason why the carrier denies or limits liability.
• Confirm the stage where the accident may have occurred.
• Check notice deadlines and time bars.
• Review photos, POD, delivery receipts, and survey materials.
• Review the B/L terms and limitation of liability.
• Separate points that can be disputed from points that may need to be accepted.
• Consult the insurer or legal adviser where necessary.

The important point is not to deny everything. In practice, it is often more effective to separate strong points from weak points and negotiate based on the parts where recovery is realistically possible.

Initial English Phrases When Responding to a Carrier Defense

If a foreign carrier, overseas agent, or P&I Club invokes defenses, the first reply should avoid admitting the defense and should request supporting documents where necessary.

A practical initial response is:

“We acknowledge receipt of your response denying liability. We are currently reviewing your position and reserve all rights and remedies available to us.”

If the forwarder wishes to request the basis of the defense, the following wording may be used:

“Please provide the supporting documents and evidence on which you rely for your defense, including relevant delivery records, survey findings, and contractual terms.”

At this stage, the forwarder should avoid wording that accepts the carrier’s defense. The response should be limited to acknowledging receipt, stating that the matter is under review, reserving rights, and requesting supporting evidence.

Practical Example: Dispute Over Packing Defect and External Force

Consider a case where imported machinery parts were found damaged after arrival, and the shipper sent a Claim Letter to the forwarder. The forwarder, as the House B/L issuer, notified the ocean carrier. The carrier responded that the damage was caused by insufficient packing and that the carrier was exempt from liability.

The carrier’s response contained a general statement that the packing was weak. However, it did not explain which part of the packing was insufficient, how the insufficiency caused the damage, or what handling occurred during transport.

The forwarder reviewed pre-shipment photos, photos of the wooden crate, photos of the damaged area at arrival, devanning records, and the survey report. As a result, it was found that part of the wooden crate had a strong impact mark that corresponded with the damage location of the internal machinery parts.

At the same time, the internal securing method inside the crate also appeared to have weaknesses. It was therefore difficult to argue that the carrier alone was fully responsible.

The forwarder argued that insufficient packing was not the sole cause and that external force during transport also contributed to the damage. The forwarder therefore requested the carrier to reconsider its complete denial of liability and to bear a reasonable share of the loss.

Ultimately, the matter was settled for part of the claimed amount, instead of the carrier maintaining a complete defense.

The important point in this case was that the forwarder did not accept the carrier’s defense at face value. At the same time, the forwarder did not ignore the possible weakness in packing. By separating the points that could be disputed from those that were difficult to dispute, the forwarder was able to reach a practical resolution.

Key Takeaway

Even if a carrier invokes defenses, the forwarder does not necessarily need to abandon the claim.

The forwarder should first classify whether the defense concerns the cause of damage, the procedure, or the scope of liability, and then review the evidence and timeline.

Different defenses require different counterarguments, including insufficient packing, inherent vice, late notice, absence of remarks, perils of the sea, and limitation of liability.

The forwarder should not emotionally reject the carrier’s defense. Instead, it should organize the facts, documents, B/L terms, stage of damage, and limitation of liability, and separate the points that can be disputed from those that are difficult to dispute.