From the Maritime Practice.

Proposed Amendments To COGSA Would Abolish $500 Package Limitation

October, 2000

The proposed amendments to the Carriage of Goods by Sea Act (“COGSA”), which were drafted with the assistance of the Maritime Law Association of the United States, will also be before Congress in 2000. The bill to amend COGSA is being sponsored by Sen. Kay Bailey Hutchinson (R.-Tex.), the chair of the Senate Surface Transportation and Merchant Marine Subcommittee, who has said that she intends to make reform of ocean cargo liability law a top priority in 2000. The bill, which will be introduced soon after Congress reconvenes in January, has broad support from a number of sectors of the maritime industry, and represents a compromise between shippers and carriers and between the shipper-favored Hamburg Rules cargo liability regime and the carrier-favored Hague/Hague-Visby liability regime for cargo damage.

The Hutchinson bill would abandon the current $500 per package limitation on liability under COGSA in favor of the higher, weight-based limits on liability contained in the Hague-Visby Rules. It would also cover the cargo through marine terminal operations and intermodal transportation, rather than just “tackle to tackle,” as under the current law. The bill would also eliminate the “errors of navigation” defense for carriers and would nullify the Supreme Court’s decision in the infamous Sky Reefer case, in which the Supreme Court upheld foreign forum clauses in bills of lading that required cargo disputes to be arbitrated or litigated abroad, even when all of the parties and the cargo itself was located in the United States.