Transport officials in the United States, the European Union and at international organizations are follow- ing different paths toward harmonizing rules governing who pays what when cargo is lost or damaged while in transit.
But while government bodies are taking different and, some say, circuitous paths toward this goal, many importers and exporters have found a solution already at hand: guidelines published seven years ago by the International Chamber of Commerce and the United Nations Conference on Trade and Development.The guidelines, ''Unctad/ICC Rules for Multimodal Transport Documents,'' may lack the theoretical elegance of a treaty that smoothes out inconsistencies in modal liability regimes. But they do the job well enough all the same, said Kersten Ohl, manager of the Multimodal Transport Institute of the International Federation of Freight Forwarders Associations.
''I ask myself whether legislation internationally on multimodal transport is necessary,'' Mr. Ohl said in an interview from Zurich.
The lack of a harmonized liability regime has led to higher insurance rates because it is not evident to the insurer ''what the risks are, and whose door can I knock on in case of loss,'' said Bryan Stone, an intermodal transport consultant based in Ettingen, Switzerland.
The ICC/Unctad rules were a practical response to the failure of most national governments to ratify the 1980 United Nations Multimodal Transport Convention, which tried to create a uniform liability regime for international intermodal movements.
The aim of that treaty was to avoid lengthy lawsuits over exactly where in the intermodal transport chain cargo damage occurred, by making the liability consistent no matter where the loss occurred.
However, only eight of the 30 countries needed to ratify the treaty have signed on. Considering that nearly two decades have come and gone, most intermodal experts believe the U.N. treaty is a dead letter.
The failure of the U.N. convention threw the matter of determining liability back to the individual modal regimes and sometimes back to conflicting national legal regimes.
The ICC/Unctad rules do not try to pick and choose among the conflicting regimes. Instead, the rule book said that if it is not immediately obvious where damage to cargo occurred - which is the case most of the time - then the basic, contractually determined liability of the multimodal transport operator (the organization arranging the through movement) applies.
If, however, it's obvious where damage occurred because, for example, there's salt water in an intermodal container, then the cargo owner can invoke the liability limits applying to the transport mode where the loss or damage occurred. The ICC/Unctad rules are not perfect, transport officials suggest: For example, it may be necessary to increase the amount of basic liability to reflect inflation or increases in average cargo values.
But according to Mr. Ohl, the ICC/Unctad rules have the advantage of basing liability limits on private contracts, without waiting for an intergovernmental solution that could take many years.
''The ICC/Unctad rules are in widespread use,'' Mr. Ohl said. ''They are applied in standard transport documents, including the Fiata multimodal bill of lading, which is used in more than 60 countries.''
But government officials working toward a more systematic solution, involving reforms of underlying liability regimes, see matters differently.
NOT ENOUGH TRADERS
The disadvantage of the ICC/Unctad rules is that not enough traders participate, said Karel Vanroye, administrator for intermodal freight transport and supply chain management in the European Commission's transportation directorate.
''Experience has shown that such voluntary solutions may fail to lead to widespread application of the rules,'' he said in a telephone interview from Brussels. ''That is basically the problem.''
A second drawback of the ICC/Unctad rules is that, where damage can be linked to a specific mode, conflicts may arise over which courts have jurisdiction, since there is no uniform international liability standard, Mr. Vanroye added.
''The ICC/Unctad rules try to make this more uniform, but we (still) have a fragmentation of approaches,'' he said.
The European Commission is studying the economic impact of the current lack of uniformity in liability regimes. The topics of study include the costs and benefits of promoting greater use of the ICC/Unctad rules, Mr. Vanroye said.
The commission's inquiry is aimed at creating a non-mandatory regime that would, nonetheless, apply unless parties to a transportation contract specifically opt out of it.
The goal of such a regime would be to create ''a level supply chain with much more transparency,'' Mr. Vanroye said. ''Considering what goes on in courts, and all the processes involved with determining liability, this should lead to substantial savings.''
In addition to the European Commission, the U.S. Department of Transportation is looking into harmonizing its liability rules with the EU, particularly those that affect intermodal shipments across the Atlantic.
EYEBALLING THE PROBLEM
The Geneva-based UN Commission on International Trade Law, known as Uncitral, also is studying the problem, as is the Comite Maritime Internationale, an international association of maritime lawyers who are trying to harmonize liability regulations for ocean and intermodal transport.
''We all would like to see one regime,'' said Lloyd Watkins, secretary of the International Group of Protection and Indemnity (P&I) Clubs, which is directly concerned with the liability regime for shipowners.
''We would find it preferable if everyone were to wait for the CMI, in combination with Uncitral, to produce its work,'' Mr. Watkins said.
He adding that the ICC/Unctad rules probably would suffice until CMI and Uncitral complete their task; there is no definite completion date for their project.
Regional solutions under review in the United States and the European Union are somewhat worrying since they would add to the proliferation of liability regimes, Mr. Watkins added. ''It's a mess, we all know it's a mess,'' he said. ''The question is, how do we get out from where we are?''
The efforts to harmonize conflicting or overlapping liability regimes is not merely a theoretical exercise for lawyers, said Mr. Stone, the intermodal transport consultant based in Ettingen, Switzerland.
At its base, the issue is how to deal with the aftermath of accidents, negligence, or theft and vandalism to cargo in transit.
Worldwide total losses from cargo theft alone are estimated at $30 billion to $50 billion a year, according to Pinkerton Consulting and Investigation, a unit of the Pinkerton security group.
''It is frustrating for the shipper or the integrator to deal with different liability regimes for different places in the transport chain, especially when there is no transparency about where the goods are at any given time and who is responsible,'' Mr. Stone said.
''Some of these are very ancient regimes indeed,'' he added.
''In Europe, for example, there are national liability regimes for railway movements, but then there is legislation based on an international treaty for cross-border rail movements, and a separate set of rules for freight carried on the roads, and a whole separate regime for transport in the former Soviet Union,'' he said.
At each interface between the different transportation modes and geographic jurisdictions ''you get discontinuities in the liability regime,'' Mr. Stone said.
AN OBSCURE LAW
Even where an international body such as the ICC or Fiata takes charge and agrees on a standard code of liability, ''the underlying law is still very obscure, and in many places it is incompatible with the standard code,'' he added.
In some jurisdictions, he noted, ''you may have a complete through bill of lading, but it may not be worth the paper it is written on, in terms of being binding on the parties.''
''Intermodality as a concept is somewhere held back as a result of this discontinuity in the world of liability,'' he said.