Contractual framework for International Freight Forwarding Services

On January 1th, 2009 the Israeli Federation of Forwarders and Customs Clearing Agents and the Israel Shippers’ Council have signed a joint contractual framework for freight forwarding services.

This contractual framework sets out the fundamental rights and obligations of the international freight forwarders and customers using international freight forwarding services.

The provisions of the contractual framework include the international freight forwarder’s undertaking that upon providing his services he will act reliably, faithfully and honestly towards his customer and towards the authorities of the State of Israel. The freight forwarder undertakes to comply with the law and regulations applicable to the carriage of goods to and from Israel. The customer is under an obligation to provide the international freight forwarder with all the information relevant to the forwarding of cargo, including a detailed description of the cargo, its value, weight, volume, packaging and other traits and characteristics in so far as they are relevant to the international forwarding service.

The provisions apply international treaties dealing with international carriage to the international freight forwarder. They establish an arbitration mechanism to settle disputes between the international freight forwarder and his customer, and provide for a list of arbitrators who will be appointed jointly by the Federation of Forwarders and Customs Clearing Agents and the Israeli Shippers’ Council.

Our office which represents the Israeli Federation of Forwarders participated in drafting the contractual framework and assisted in negotiations with the Israel Shippers’ Council.

Please find below the Contractual framework for International Freight Forwarding Services:

The conditions set out below shall apply to contracts between the international freight
forwarder, as defined below, and his customers. These provisions shall apply subject to any written contract between the international freight forwarder and his customer. Nothing in these conditions shall derogate from the provisions of the Customs Agents Law, 5725-1964, as amended from time to time (hereinafter “the law”).

An “international freight forwarder” for the purpose of these conditions is a person whose business, in whole or in part, is to forward cargo from Israel abroad or from abroad to Israel.

A “customer” for the purpose of these conditions is any entity which enters into a contract with an international freight forwarder in connection with receiving international freight forwarding services as defined below, whether at his own initiative or at the initiative of the forwarder.

“International freight forwarding services” for the purpose of these conditions include all the services given by the international freight forwarder or on his behalf within the framework of the contract with the customer and which were agreed upon with the customer.

A. The international freight forwarder declares that he is authorized by law and possesses the competence, skills and resources which enable him to provide international freight forwarding services to the customer.

B. When providing his services the international freight forwarder will act reliably, faithfully and honestly towards his customer and towards the authorities of the State of Israel and the authorities of the countries from which the cargos are sent or in which they arrive.

C. The international freight forwarder undertakes to act in accordance with the law and in accordance with the laws applicable to the forwarding of cargos to and from Israel.

D. The customer will provide the international freight forwarder with all the information relevant to the forwarding of cargo, including a detailed description of the cargo, its value, weight, volume, packaging and other traits and characteristics in so far as they are relevant to the international forwarding service, including the fact that the material is dangerous and/or perishable and/or valuable. The information will be given in writing, whenever possible. The customer is responsible for the suitable packing of the cargo and for preparing and delivering the relevant authorizations and documents needed to provide international forwarding services. The international freight forwarder or a professional body acting on its behalf will instruct the customer – upon the latter’s request and in so far as possible – regarding the authorizations and documents which the customer must produce for the purpose of forwarding the cargo or as to any information and instructions required to perform the forwarding service.

E. The international freight forwarder will arrange the international forwarding of the cargo. As part of this service, the international freight forwarder will coordinate with, and order the services needed to perform the carriage from, shipping, airline, overland transport, contractual carriers and storage companies (hereinafter: “the actual carriers”) and will provide the customer with information, from time to time, regarding the status of the cargo, as required in the circumstances of the matter.

F. The international freight forwarder will assist the customer to arrange carriage related insurance for the cargo, in so far as he is asked to do so by the customer, however, the customer is aware that the forwarder is not liable for any act and/or omission in relation to the insurance cover.

G. The international freight forwarder is responsible for choosing suitable actual carriers unless the actual carriers are chosen by the customer. The international freight forwarder is responsible for giving them the appropriate professional instructions, in accordance with the needs of the customer and the information which he provided to the international freight forwarder, as stated in Clause 4 (“D”) above. The international forwarder will act as the agent of the customer in respect of the actual carriers.

H. The international freight forwarder will not be responsible for changes in the route of the carriage and/or the duration of the carriage and/or the date of arrival of the goods at their destination and/or for loss/damage caused to the cargo when in the possession of the actual carriers, provided that these were caused in circumstances which were outside the control of the international forwarder. Without derogating from the aforesaid, the international freight forwarder will inform the customer, in so far as he is in possession of such information, regarding an event in the course of which damage has been caused to the cargo or there has been a delay in its carriage.

I. Notwithstanding the provisions of Clause 8 (“H”) above, if the international freight forwarder issues a bill of lading and/or other transport document, which regulates the conditions of carriage, the terms specified in this document will be subject to the conditions set out in that bill of lading or transport document.

J. It is agreed that the liability of the international freight forwarder in relation to the international forwarding services, is limited, in any event, in accordance with the provisions of the international conventions dealing with international marine or air transport, as appropriate, in respect of all the services and each stage of the transport, including limitations regarding the period of prescription and limitation of liability sums. Without derogating from the aforesaid, the periods of prescription are: in marine transport and/or in combined transport which includes marine transport – 12 months from the date of delivery of the cargo or from the date on which it should have been delivered; in air transport and/or combined transport which includes air transport – 24 months from the date of delivery of the cargo or from the date on which it should have been delivered. In the event of the provision of international freight forwarding services which do not include marine and/or air transport – 12 months from the date of delivery of the cargo or from the date on which it should have been delivered. The limit of liability of the international freight forwarder is limited: in marine transport and/or in combined transport which includes marine transport – to 1000 US Dollars per packaged unit of cargo or 3 US Dollars per gross kilo of cargo lost or damaged, whichever is higher; in air transport and/or combined transport which includes air transport – to 25 US Dollars per gross kilo of cargo lost or damaged. In the event of the provision of international freight forwarding services which do not include marine and/or air transport – 12 US Dollars per gross kilo of cargo lost or damaged.

K. Payments due from a customer to an international freight forwarder for international freight forwarding services shall not be subject to set-off, unless expressly agreed otherwise.

L. The international freight forwarder shall have a lien in accordance with the law. Without derogating from the aforesaid, the international freight forwarder shall have a lien on any cargo and on the documents relating to any cargo, in respect of any international freight forwarding services provided to the customer up to that time by the freight forwarder or anyone acting on his behalf and in relation to debts and/or charges in respect of which the international freight forwarder gave the customer prior notice in writing of the possibility that the customer would be charged with them. The lien is contingent upon the international freight forwarder applying to the Director of the Chamber of Commerce in Haifa and the North to appoint an arbitrator who shall decide with regard to the debt of the customer to the international freight forwarder. The arbitrator will be appointed from a list of arbitrators (hereinafter: “the list of arbitrators”) which shall be prepared jointly by the Israel Shippers Council and the Israeli Federation of Forwarders and Customs Clearing Agents (hereinafter: “the organizations”). An arbitrator included in the list of arbitrators will undertake to conclude the arbitration proceedings within a period which shall not exceed 30 days. The organizations shall be entitled to add or detract from the list of arbitrators, from time to time, upon their mutual agreement. The customer shall be entitled at any stage during the course of the arbitration to deposit the sum in dispute with the arbitrator, and upon it being deposited, the lien shall be discharged and the cargo and documents relating to it shall be released, in so far as detained by the international freight forwarder. The arbitrator shall act in relation to the sum deposited in accordance with the arbitration award.

M. Any claim in relation to these General Conditions or in respect of an event to which these General Conditions apply, shall be subject to Israeli law and the exclusive jurisdiction of the courts in Israel.