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The United Nations Conference on Trade and Development (UNCTAD) published on 15 February a report on the implications of the COVID-19 pandemic for the performance of commercial contracts for the carriage of goods by sea, and multimodal contracts of carriage that (may) involve carriage by sea. The report seeks to assist commercial parties to better understand some of the key legal issues arising from the pandemic and provide them recommendations, as well as related considerations for policymakers.

The report notes that several issues arising from the pandemic affect the performance of contracts of carriage of goods by sea, such as blank sailings and delays, which lead to physical damage to perishable cargoes for example, and ultimately economic loss. The effect of force majeure clauses on liability and allocation of risks as regards delays and booking cancellations has therefore put a significant impact on the performance of these contracts of carriage. It is therefore recommended to modify the so-called “Caspiana” clauses in bills of lading, permitting the carrier to discharge at an alternative port in the event of delays at the designated port of discharge, so as to provide for some apportionment of transhipment costs in the event of discharge at an alternative port. A contractual cap could also be provided on container demurrage, and provision for extension of free time, when the port of discharge is subject to delays in returning containers. But the report acknowledges that it is unlikely that in practice a carrier would agree to an increase in its liability beyond the mandatory levels, given the significant imbalance in the respective bargaining power of the parties with the increasing “forced” use of carrier haulage.

The authors also draw up recommendations to policymakers that can be considered in respect of the current and future pandemics, such as allowing crew changes at any time, giving seafarers priority access to vaccination, but most importantly considering mandatory controls on container demurrage accruing at ports whose operation is affected by pandemic/epidemic restrictions in that particular country, and ensuring that cross-border checks applicable to freight transport are kept to a minimum to avoid delay.