GlossaryEN1 min readUpdated: Jun 22, 2026

Compensation for loss of cargo

Compensation for loss of cargo is the indemnity a carrier or transport insurer owes when goods are wholly or partially lost in transit.

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Last updated: 22 June 2026Published: 19 June 2025

Source: https://unece.org/transport-logistics-supply-chain-management

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Logistics concept

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1 min

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134

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Definition & Explanation

Compensation for loss of cargo is the indemnity a carrier or transport insurer owes when goods are wholly or partially lost in transit. The applicable liability regime depends on the mode of transport: the CMR Convention governs international road freight, the Hague-Visby Rules cover most sea shipments, and the Montreal Convention applies to air cargo. In every case, the carrier's liability is capped – typically per kilogram of gross weight – and actual cargo values frequently exceed those limits, making supplementary cargo insurance standard practice for shippers of high-value goods. The claimant must document the loss and file a formal notice within the prescribed deadlines; late or missing notifications can extinguish the claim entirely. Compensation for loss is distinct from claims for cargo damage or delay, which follow separate liability thresholds and procedural rules.