3.1 Subject to the provisions of paragraphs 3.2 and 3.3 below, the responsibility of the carrier for the goods under this Instrument covers the period from the time that the carrier has received the goods from the consignor in the place of receipt until the time that the goods are delivered by the carrier to the consignee in the place of delivery.

3.2 However, parties may agree in the contract of carriage that-

(a) certain activities, which according to the contract of carriage are to be performed during the period referred to in 3.1, shall be carried out by or on behalf of the shipper or the consignee, such as loading, stowage, discharging, or temporary storage of the goods;

(b) the carrier acting as an agent of the shipper may contract out certain specified parts of the carriage to a third party, thereby limiting the scope of the contract.

In the event a negotiable transport document will be issued, such document shall reflect any agreement referred to in this paragraph.

3.3 In the event the carrier acting as an agent of the shipper contracts out certain specified parts of the carriage to a third party, it shall:

[(a) conclude a contract with such third party on the terms which are customary for the particular mode of transport or which are compulsory applicable to the part of the carriage that is contracted out;

(b) take care that parties to such contract shall be the contracting shipper and such third party, while the consignee under such contract should be a subsequent carrier or the consignee under the contract of carriage, as the case may be;

(c) effect payment of the remuneration due under such contract, unless otherwise agreed,

(d) exercise reasonable care, having regard to the specific factors that locally apply, in the selection of the third party;

(e) provide such third party with all information and instructions which are necessary for a proper carrying out of his tasks, including, as the case may be, any information on loss or damage incurred in respect of the goods and any instructions on the handing over of the goods to a subsequent carrier or to the consignee under the contract of carriage;

(f) take care that any information, which the shipper, the person in possession of the right of control, or the consignee, may reasonably request in respect of the part of the carriage contracted out to the third party, will be provided to any of these persons with reasonable despatch.]

[exercise due diligence in selecting the third party, conclude the contract with the third party on customary terms and shall do everything that is reasonably necessary or desirable for enabling the third party to perform duly under such contract.]

During the period that the goods are in his custody, a carrier is responsible for the goods. This means that, where in the event of port-to-port carriage a terminal operator acts as the subcontractor of the carrier, the goods are already under the responsibility of the carrier when they are still on the terminal, waiting to be loaded. The same situation applies, mutatis mutandi, in the discharge port. Whether during such period a carrier will be liable for loss or damage to the goods is another matter. This will depend on whether a tackle-to-tackle clause will be held valid under this Instrument.

The second paragraph leaves intact two existing practices. The first is the practice that certain activities, which expectedly would be the task of the carrier, are carried out by or on behalf of another party to the contract of carriage. Most typical example is the fios clause in the charterparty carriage. It is a matter of course that a ‘who does what’ has to be clearly agreed between the parties and evidenced in the transport document. In view of the protection that the third party holder of a negotiable transport document deserves, this exception of the rule should be reflected in such document.

The second practice is that of ‘through carriage’. This has to be distinguished from ‘combined transport’ or ‘multimodal transport’. The last two expressions cover contracts of carriage under which the goods may be transshipped from one mode of transport into another, but under the responsibility of one single carrier.

‘Through carriage’ or ‘through transport’ means that (usually) part of the voyage is carried out by the carrier and another part by another carrier, who is contracted by the first carrier not as his subcontractor, but on behalf of the shipper. A typical example leading to ‘through transport’ is a provision in a contract of carriage that the carrier only assumes responsibility for that part of the carriage that he carries out with means of transport under his own management. In fact, a ‘through transport’ contract is a mixed contract: it is partly a contract of carriage and partly a forwarding contract. Because this practice of ‘through carriage’ may create ambiguity, it is felt that the duties of such carrier, who also acts as an agent, should be spelled out in this chapter. This has been done in the third paragraph.

It follows that, during the parts of the carriage which are contracted out, the carrier will not be responsible in a capacity as a carrier, but in his capacity as an agent only. If the first part of the carriage is contracted out, the responsibility of the carrier starts when he takes over the goods from the third party. If the last part of the carriage is contracted out, the responsibility of the carrier ends when he hands over the goods to the on-carrier. Such handing over of the goods must be deemed to be the delivery of the goods under the carriage part of the mixed contract. Any negotiable transport document has to be produced to the carrier at that point in time. It is, subsequently, the duty of the on-carrier to deliver the goods at their final destination to the consignee as he appears under the contract of carriage.