By Luis Lopez, AI transportation consultant, CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast
Shippers who are used to trucking claims often get a surprise the first time they file a claim for cargo damaged on an ocean voyage. The rules, the limits, and the deadlines are different. A claim that would be straightforward against a motor carrier can be capped at a small amount when the loss happens at sea.
The reason is that ocean cargo moving to and from U.S. ports in foreign trade is governed by the Carriage of Goods by Sea Act (COGSA), while domestic interstate trucking claims are governed mainly by the Carmack Amendment. This article compares the two at a practical level and explains why marine cargo insurance matters so much.
Two Different Liability Regimes
Carmack for trucking
Under the Carmack Amendment, 49 U.S.C. 14706, a motor carrier is generally liable for the actual loss or injury to property it transports in interstate commerce. The shipper proves good condition at origin, damaged condition or shortage at delivery, and the amount of loss. The carrier then has limited defenses. Carriers can limit liability through released rates when the shipper agrees in writing, but the default is full actual loss. For more background, see the Carmack Amendment explained.
COGSA for ocean
COGSA starts from a different place. It sets minimum duties for the ocean carrier, such as exercising due diligence to make the ship seaworthy and properly caring for the cargo, but it also gives the carrier a list of defenses that are broader than what a trucker has. Some losses at sea are excused by law even when the cargo arrives damaged.
The biggest practical difference is the package limitation.
The Package Limitation Concept
COGSA limits the carrier’s liability to 500 US dollars per package, or per customary freight unit for goods not shipped in packages, unless the shipper declares a higher value before shipment and that value is inserted in the bill of lading.
That limit was set long ago and has not been adjusted, so it can be far below the value of modern cargo. A pallet of electronics, machinery components, or pharmaceuticals can be worth many times the limit.
Two questions usually decide how much the limitation matters in a given claim:
- What counts as a “package”? The answer often depends on how the cargo is described on the bill of lading. If the bill lists the number of cartons or pallets inside a container, those units may be the packages. If it lists only “one container,” the result may be very different. Careful bill of lading descriptions matter.
- Was a higher value declared? Declaring a higher value can raise the limit, but carriers usually charge more freight for it, and many shippers choose insurance instead.
Released value works differently in trucking, but the logic is related: liability is tied to what was agreed in the shipping document. A related guide covers released value and limitation of liability on the domestic side.
Notice of Loss
COGSA expects prompt written notice of loss or damage. If damage is apparent, notice should be given at the time the goods are removed into the custody of the person entitled to delivery. If damage is not apparent, a short notice period applies after delivery.
Missing the notice window does not automatically kill the claim, but it shifts the burden: the carrier is presumed to have delivered the goods in the condition described on the bill of lading, and the claimant has to overcome that presumption.
The practical rule is simple. Inspect at delivery, note exceptions on the delivery receipt, photograph everything, and send written notice to the ocean carrier immediately.
The One-Year Suit Limit
The most important COGSA deadline is the time limit for suit. A lawsuit against the carrier must be brought within one year after delivery of the goods, or the date when they should have been delivered.
That one year is for filing suit, not just for submitting a claim. Negotiating with the carrier or its insurer does not automatically stop the clock. Claimants who spend months exchanging emails can find the year has run. If settlement talks are going slowly, a written extension agreement or a timely filing is needed to preserve rights.
Carmack deadlines work differently, with separate periods for filing a written claim and for bringing suit, usually set out in the bill of lading. A broader look at freight claims deadlines and time limits is worth reviewing before assuming any deadline applies.
Through Bills and Inland Legs
Many international shipments do not end at the port. A container may be discharged at a U.S. port and then move by rail or truck to an inland destination, all under a single through bill of lading issued by the ocean carrier or an intermediary.
In general terms:
- By default, COGSA covers the period from loading onto the ship to discharge from it.
- Through bills commonly extend COGSA terms by contract to the inland portions of the trip, and often extend the carrier’s limitations to its subcontractors such as truckers and rail lines.
- Whether Carmack or COGSA terms govern an inland leg can depend on how the shipment was booked, who issued which bill, and the exact contract language.
The takeaway: if damage is discovered at an inland warehouse after an import, do not assume Carmack applies just because the last leg was by truck. Read the through bill and get legal advice before relying on either regime.
Why Marine Cargo Insurance Matters
Because the COGSA limitation can be low and carrier defenses are broad, marine cargo insurance is the primary protection for many importers and exporters. A cargo policy pays the insured based on the policy terms, regardless of whether the carrier is legally liable. The insurer may then pursue the carrier through subrogation.
Points to review with a broker or underwriter:
- Whether the policy covers all risks or named perils only.
- Whether coverage runs warehouse to warehouse, including inland legs.
- How value is calculated, such as invoice value plus freight and a margin.
- Exclusions such as improper packing, inherent vice, or delay.
- General average exposure, which can arise when a voyage suffers a casualty.
The difference between carrier liability and insurance is a common source of confusion; see cargo insurance vs carrier liability for the trucking side of that question.
Where AI Helps With Ocean Claims
As an AI transportation consultant, I find the strongest uses here are administrative. Tools can extract package counts and descriptions from bills of lading, flag when a cargo description lists only containers, track the one-year suit date from delivery records, and assemble photos, surveys, and invoices into a claim file. A human still has to make the legal judgments about which regime applies and when to file suit.
Practical Checklist
- Describe cargo by package count on the bill of lading.
- Decide before shipment whether to declare value or insure.
- Inspect at delivery and give written notice promptly.
- Calendar the one-year suit deadline on day one.
- Read the through bill before choosing a theory of recovery.
For more conversations on freight and AI, subscribe to the Freight Guru Podcast.
About the author: Luis Lopez is a Miami-based AI transportation consultant and logistics entrepreneur, the CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast.
This article is general information for the freight community, not legal advice. Talk to a transportation attorney about your specific situation.