Declaration of Value to Carrier
BIFA (2005) Section 16
Where there is a choice of rates according to the extent or degree of the liability assumed by carriers, warehousemen or others, no declaration of value where optional will be made except under special arrangements previously made in writing.
CIFFA Section 5
The Customer must give instructions in writing to the Company a reasonable time before the tender of goods for storage or transport where it requests the Company to:
(d) make a declaration of value or special interest in delivery to any carrier or terminal;
NCBFAA Section 7.
Declaring Higher Value to Third Parties
Third parties to whom the goods are entrusted may limit liability for loss or damage; the Company will request excess valuation coverage only upon specific written instructions from the Customer, which must agree to pay any charges therefore; in the absence of written instructions or the refusal of the third party to agree to a higher declared value, at Company's discretion, the goods may be tendered to the third party, subject to the terms of the third party's limitations of liability and/or terms and conditions of service.
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Peter Jones' Commentary:
This issue has not created many problems for forwarders, probably because all forwarding associations take the same approach: a customer who wants to have the true value of its goods declared to the carrier - and pay higher freight!!- must specially advise the forwarder. In fact, customers rely on insurance to protect them against damage or loss, and their insurers do not request a warranty that the true value of the goods has been declared to the carrier.
US law has qualified this principle: a carrier (and by analogy, a forwarder) must give a shipper a reasonable opportunity to exercise that right. However, one case, Read Rite v. Burlington, which can be accessed through the Case Archive directory, holds that a shipper who has its own insurance program cannot complain that it was not given a reasonable opportunity to declare value. This case recognizes what is the present commercial reality: cargo interests do not consider that declaring value per individual shipment is an effective way of obtaining protection against certain financial risks associated with the movement of cargo.