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Trading Guidelines for Freight Forwarding Business

Stephen Otieno

Trading Guidelines for Freight Forwarding Business

FIATA Guidelines

  • Standard Trading Conditions are commonly adopted by national associations in FIATA, spelling out the general contractual obligations of the freight forwarder in his relationship with the customer as well as his rights, obligations, liabilities and defences. 
  • The STCs are formulated in accordance with the business practices, laws and regulations of the specific country 
  • In an attempt to harmonize and professionalize the freight forwarding business FIATA has come up with guidelines for freight forwarding companies when undertaking their business. 
  • These are rules that have been documented by FIATA that specifically have the freight forwarder in mind as FIATA model rules. 
  • The FIATA guide line rules will supersede any other rule when referred to which may be in conflict with the FIATA rules.

FEAFFA Standard Trading Conditions

  • The FEAFFA STC are modelled on the FIATA Model rules. 
  • The FEAFFA STC are based on 30 different Articles. 
  • The Articles cover critical areas of business that protect the Company, its agents and the customer.
  • The Articles are:
    • Article 1: Introduction
    • Article 2: Special Attention
    • Article 3: Interpretation 
    • Article 4: Owner’s Risk
    • Article 5: Application of Trading Terms and Conditions 
    • Article 6: Applicable Legislation 
  • Article 7: The Company as A Principal or an Agent
  • Article 8: Sub Contracting 
  • Article 9: Company’s Discretion in The Absence of Instructions 
  • Article 10: Company’s General Discretion 
  • Article 11: Insurance 
  • Article 12: Company’s Obligations in The Absence of Instructions 
  • Article 13: Customer’s General Responsibilities
  • Article 14: Customer’s Responsibilities for Packaged and Containerized Goods
  • Article 15: Customers Instructions
  • Article 16: Goods Requiring Special Arrangements 
  • Article 17: Goods Requiring Prior Consent of the Company 
  • Article 18: Perishable Goods 
  • Article 19: Acceptance of Delivery 
  • Article 20: Collection of Expenses 
  • Article 21: Examination of Landed Goods
  • Article 22: Duties, Taxes, Imports, Levies and Deposits
  • Article 23: Charges
  • Article 24: Risk of Posted Items 
  • Article 25: Lien 
  • Article 26: Indemnity by The Customer
  • Article 27: Limitations of The Company’s Liability
  • Article 28: Breach 
  • Article 29: Arbitration  
  • Article 30: Variation of These Trading Terms and Conditions

IATA Guidelines

  • The IATA trading guidelines are closely related to the FIATA guidelines only that they are more inclined to the air transport. 
  • IATA has introduced a New Conditions of Contract in IATA Air Waybill. 
  • The new provisions in the Conditions of Contract make reference to the Montreal Convention in addition to the Warsaw Convention. 

Learning Activities

Discuss reasons why a freight agent should have standard trading terms for their operations.

Assignment

  1. Explain sources of standard trading terms
  2. Explain benefits of using standard trading terms

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