Does the Logistics carrier's liability for compensation include market value loss?

According to Article 55 of the Maritime Code, the carrier of a maritime cargo transportation contract is liable for compensation for cargo damage that occurs during the period of their responsibility. 

Article 55 states: "The compensation for the loss of goods shall be calculated based on the actual value of the goods; the compensation for the damage to goods shall be calculated based on the difference between the actual value of the goods before and after the damage or the cost of repairing the goods. The actual value of the goods shall be calculated based on the value of the goods at the time of shipment, plus insurance and freight charges. The actual value of the goods specified in the preceding paragraph shall be reduced by the relevant expenses that are paid less or waived due to the loss or damage of the goods."

Article 55 of the Maritime Code establishes that the actual compensation for goods is composed of the difference in actual value before and after the cargo loss or damage and the cost of repairing the goods. However, whether it includes market value loss is not explicitly stated in this provision. Based on this, the Supreme People's Court clarified in the case of Ha Chi Man Shipping Co., Ltd. v. Shanghai Shenfu Chemical Co., Ltd. and Japan Tepco Shipping Co., Ltd. (Case No. (2013) Min Ti Zi No. 6) that "the actual value of the goods should be calculated based on the value of the goods at the time of shipment, plus insurance and freight charges." 

In other words, it is based on the difference in CIF price before and after the cargo is damaged. Due to the longer shipping time, the value of the goods is easily affected by market fluctuations. The calculation method for the actual value of the goods specified in Article 55 of the Maritime Code excludes market value loss, which is in line with the principles of causality and reasonable foreseeability in contract breach compensation.  

Therefore, the Supreme Court ruled in this case: "The actual value of the goods specified in Article 55 of the Maritime Code does not include market value loss." It should be noted that regardless of the trade term used for the transaction, CIF price is applicable for the compensation of cargo damage disputes, even if the rights holder does not bear or need to bear freight or insurance. This inevitably creates a possibility of obtaining compensation that is sometimes higher than the actual losses suffered.

Zhai Dongwei International logistics Attorney team was founded in 2007. Its founder, Zhai Dongwei, is the founding partner of Guangdong Yingzun Law Firm. Focusing on International trade,maritime affairs, and supply chain cases for more than 16 years, the team currently has more than 30 professional logistics attorneys, of which more than 10 have overseas work and study experience, and can use Chinese, English and French to work and participate in business negotiations.