GlossaryEN1 min readUpdated: Jun 19, 2026

allocation of liability

When cargo is lost or damaged in transit, allocation of liability determines which party bears responsibility for which part of the loss.

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Last updated: 19 June 2026Published: 27 January 2026

Source: https://de.wikipedia.org/wiki/Haftung

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Logistics Concept

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Definition & Explanation

When cargo is lost or damaged in transit, allocation of liability determines which party bears responsibility for which part of the loss. It establishes – either by contract or by applicable law – whether the shipper, freight forwarder, carrier, or consignee is accountable for a given cause of damage. The CMR Convention governs road transport, while sea freight falls under the Hague-Visby Rules or other regimes depending on the contract, most of which also cap the carrier's maximum exposure. In practice, parties often negotiate additional clauses to close responsibility gaps – for instance, covering damage caused by the shipper's inadequate packaging or the carrier's failure to secure the load. Only with clearly allocated liability can each party accurately assess and insure its own risk.

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