Cargo claims in bulk shipping: shortage and quality

A cargo claim in bulk shipping is a demand for compensation because the cargo arrived short in weight or off-specification in quality. Two claims often run side by side from the same voyage: the buyer against the seller under the sale contract, and cargo interests against the carrier under the bill of lading or charterparty. Each has its own evidence and its own deadlines.

The two kinds of cargo claim

Shortage claims concern quantity: the outturn weight is below the bill of lading weight or the contractual quantity. The gap may be real loss or an explained difference.

Quality claims concern the goods: moisture, admixture, free fatty acid, contamination from a previous cargo, or water damage. They are proved with sealed samples and analysis certificates.

Who claims against whom

Buyer against seller. Did the seller deliver the contractual quantity and quality? On a CIF sale the weighing and sampling clauses decide where both are settled. On GAFTA 100, a tale quale CIF form for feedingstuffs in bulk, that is at discharge unless the parties agreed otherwise (for quality: final at loading). Where risk passes is covered in CIF contracts for agricultural commodities.

Cargo interests against the carrier. Did the carrier deliver what the bill of lading says it received? The applicable regime sets its exceptions and limits. Where the bill of lading was issued against a letter of indemnity, the carrier's position and its P&I cover change; see letter of indemnity in shipping.

The same missing tonnes can be a seller's problem, a carrier's problem, both or neither, so open two files on the first day. If the cargo was insured, the insurer is a third file; see if the cargo is insured below for what the clauses cover and how subrogation works.

The evidence, and where it comes from

The core evidence in a cargo claim cannot be recreated afterwards. Each document exists because someone, such as an independent cargo surveyor, was on the quay or on board at the right moment.

Document	Created	What it shows
Survey at loading	before and during loading	holds or tanks and cargo at shipment
Sealed samples	loading and discharge	quality at that moment
Weight certificate	at the weighing installation	weighed quantity and method
Draft survey	before and after loading and discharge	the ship's figure
Outturn report	end of discharge	what came out, per hold or tank
Letter of protest	when the irregularity is seen	that you objected, and to what

Samples are sealed by both sides. Under the GAFTA Sampling Rules No.124, a sealed sample is one sealed jointly by buyer and seller or by their superintendents. One side's seal alone does not meet that definition. See sampling rules in the agricultural trade.

The weight basis is a contractual choice. Under the GAFTA Weighing Rules No.123, a draft survey figure is not the contractual weight unless both parties have agreed to it in writing, and the weight certificate has to say which method produced the figure. See the weight certificate and the outturn report and cargo shortage.

The protest is written promptly. Britannia P&I advises a draft survey at every discharge port, a letter of protest where the shore figure and the survey figures disagree, and, if possible, the cargo interests' signature on that letter.

Trade allowance: when is a difference a real shortage?

Weighing a bulk cargo is never exact, and the trade accepts a margin before a difference counts as a loss. The American Club's 2022 guidance for dry bulk puts this trade allowance at generally between 0.5% and 1% of the bill of lading quantity for bulk and liquid cargoes, unless the charterparty provides otherwise. There is no universal figure; the one in your contract or charterparty decides.

Moisture loss on a cargo shipped wet and cargo remaining on board are explained differences that have to be accounted for before anything is claimed. A shore weight set against a ship's figure is not automatically a shortage: part or all of the gap may be two methods disagreeing. What remains outside the margin calls for a written protest without delay.

If the cargo is insured: what marine cargo insurance pays and what it does not

Marine cargo insurance pays for physical loss of or damage to a cargo during an insured transit. For grain and vegetable oil it is nearly always written on the Institute Cargo Clauses (A), (B) or (C) of 2009. Clauses (A) cover all risks except what they exclude; (B) and (C) cover named perils only, and (B) names more of them than (C). Under a CIF sale the seller takes out the cover and passes the policy or certificate on with the shipping documents, so that the buyer, who carries the risk from loading, can claim; the ICC's CIF rule sets a default of Clauses (C).

Normal loss is not insured. Whatever the clause level, all three sets exclude ordinary leakage, ordinary loss in weight or volume and ordinary wear and tear (clause 4.2), and loss caused by inherent vice or the nature of the cargo (clause 4.4). The Marine Insurance Act 1906 (section 55(2)(c)) has the same starting point. For agri bulk that means a shortage inside the normal loss of a bulk cargo is the assured's own; it is the trade allowance above that decides where that line sits. A shortage caused by an insured peril, such as water entering the hold or a jettison, is a different matter.

Cause matters more than size. Wet damage can be inherent vice, an insured peril or a consequence of how the cargo was carried. FOSFA's glossary defines cargo sweat as condensation forming on the cargo when its temperature is below the dew point of the surrounding air, and ship's sweat as condensation on the hold walls when they fall below the dew point of the air in the hold. That is why the surveyor's finding on cause is worth more to an underwriter than the size of the loss.

Who can claim, and when cover runs. The Institute Cargo Clauses are subject to English law (clause 19), so the Marine Insurance Act 1906 applies. The claimant needs an insurable interest in the cargo at the time of the loss (Act, sections 5 and 6, and clause 11). Under a CIF sale the seller takes out the cover and hands over the policy or certificate with the shipping documents, so the buyer, who carries the risk from loading, can claim as assignee (clause 15). The cover is warehouse to warehouse (clause 8): it starts when the cargo is first moved for immediate loading and ends at completion of unloading at the final warehouse, or 60 days after discharge overside at the final port, whichever comes first. For cargo that sits in a terminal tank after discharge, the 60 days and the wording on storage outside the ordinary course of transit are the ones to read. Who arranges what under CIF is in CIF contracts in the agri commodity trade.

Preserve your rights against the carrier. Once the insurer has paid, it is subrogated to the assured's rights and remedies against whoever caused the loss, in so far as the assured has been indemnified. Clause 16 turns this into a duty: take reasonable measures to minimise loss and ensure that rights against carriers and other third parties are properly preserved and exercised. In practice that means a timely notice of loss and a letter of protest or note of protest, kept with the survey report. A missed deadline against the carrier is a problem for both the assured and the insurer.

Notice periods and time bars for a cargo claim

A notice of loss or damage concerns evidence. Under the Hague-Visby Rules it goes in writing to the carrier or its agent at the port of discharge, before or at the removal of the goods, or within three days if the loss or damage is not apparent. Miss it and the claim survives, but the removal counts as prima facie evidence that the carrier delivered what the bill of lading describes. After a joint survey or inspection no notice is needed; the Hamburg and Rotterdam Rules have a similar exception, limited to loss or damage found during that joint survey.

A time bar concerns the claim itself. Miss it and the claim is lost.

Regime	Notice, apparent loss	Notice, non-apparent loss	Time for suit
Hague-Visby Rules	before or at removal	within three days	one year from delivery
Hamburg Rules	by the working day after hand-over	within 15 consecutive days	two years
Rotterdam Rules	before or at delivery	within seven working days	two years

Check which regime your bill of lading is subject to before you count a day. The Hamburg Rules entered into force on 1 November 1992 and, according to UNCITRAL's status page (September 2026), have 36 parties; the Netherlands and the United Kingdom are not among them. The Rotterdam Rules had five parties in September 2026, against the twenty required, so they are not in force.

On the sale contract side, the contract's own rule book sets the clock. Under the FOSFA Rules of Arbitration and Appeal (1 April 2026), a quality or condition claim, naming your arbitrator, has to be sent to both the other party and FOSFA within 90 consecutive days of completion of discharge on CIF-type terms, or of completion of delivery on FOB, ex-tank, ex-mill or ex-store terms; other claims have one year. GAFTA Arbitration Rules No.125 (contracts from 1 July 2026) give one year, from a starting point set by the delivery term. Under both, a late claim can be barred once the respondent raises the point; admitting it anyway is the tribunal's discretion, not your right. See GAFTA and FOSFA arbitration.

GAFTA 124 adds short clocks of its own for sending the analysis sample and copying the certificate; missing them can bar a claim for rejection or allowances unless the tribunal decides otherwise. Unused samples are disposed of after a set period unless a party instructs the superintendent in writing to keep them. Give that instruction as soon as a claim is likely.

Why cargo claims fail on procedure

• Protested too late. See the letter of protest and the note of protest for who issues which, and when.
• No joint sampling. The dispute becomes about the sample instead of the result.
• Arbitration notified out of time. Under FOSFA rules a quality claim sent after the 90-day limit is exposed to a time-bar defence, however good the evidence.

This is not legal advice: on a live claim, bring your own contract, your insurer and, where it matters, a lawyer.

From quay to file, without retyping

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