Liability is generally expected to follow control
On the first of July, a revised Direct Air Waybill framework quietly reshaped the contractual landscape of global air cargo, reallocating legal responsibility in ways that may leave freight forwarders exposed to liabilities their insurance was never built to bear. The change, implemented over the objections of the international forwarder community, reflects a recurring tension in trade law: when obligations are redrawn faster than the industries they govern can adapt, the gap between contract and coverage becomes a risk of its own. The industry now faces the slower, harder work of understanding what the new rules actually cost — and who, in practice, will pay.
- A revised air waybill framework took effect July 1, and freight forwarders are warning it may expose them to shipper-level legal liabilities their existing insurance policies were never designed to cover.
- FIATA formally requested a delay until October to allow legal and insurance review, but IATA denied the request and defended the process, leaving forwarders to absorb the changes mid-operation.
- The US Airforwarders Association is urging members to obtain written confirmation from every airline about which contractual terms apply, as some carriers have signaled they will not immediately adopt the revised framework.
- Insurers may revise underwriting standards and pricing as the practical implications become clearer, but for now a dangerous gap exists between what forwarders are contractually responsible for and what their policies actually cover.
- Industry experts are advising forwarders to verify shippers hold comprehensive cargo insurance and to offer shipment-by-shipment coverage where needed — treating immediate protection as the most viable bridge while the market catches up.
On July 1, a revised Direct Air Waybill framework took effect across the air cargo industry — and the reaction was immediate. Insurers and freight forwarders are warning that the changes may have done something far more consequential than rebalance contractual obligations: they may have shifted legal liability onto forwarders in ways that existing insurance policies were never designed to address.
Matthew Phillips, chief commercial officer at cargo insurer Breeze, described the revised framework as a significant reallocation of risk. Freight forwarder liability insurance has traditionally been built around the risks forwarders actually control — their own errors and omissions when arranging transport. It was not designed to cover obligations that properly belong to shippers. If the new rules force forwarders to assume shipper-level responsibilities, the insurance gap could be both substantial and dangerous.
The framework arrived after what many considered an accelerated process. FIATA, the global body representing freight forwarders, formally requested that implementation be delayed until October to allow time for legal and operational review. The request was denied. IATA defended the changes, saying the required consultation had been followed and that the revised rules represented an appropriate rebalancing of responsibilities. The US Airforwarders Association echoed FIATA's concerns, advising members to obtain written confirmation from every airline about which contractual terms would apply — a practical necessity given that some carriers have already signaled they do not intend to adopt the revised framework immediately.
The uncertainty is compounded by questions about how the new rules interact with established trading conditions long upheld by English and Welsh courts, particularly around dangerous goods and cargo misdeclaration. Whether existing legal frameworks absorb or conflict with the revised DAWB arrangements will likely occupy UK forwarders and their insurers for months.
Phillips advised forwarders not to wait for the insurance market to clarify. The most practical step, he suggested, is to confirm that shippers hold comprehensive all-risks cargo insurance and, where appropriate, to offer coverage on a shipment-by-shipment basis. The revised framework is in effect — but the real work of understanding what it means, and what it costs, is only beginning.
On July 1, a revised framework governing how airlines and freight forwarders do business took effect—and it has created immediate tension in the cargo industry. The new Direct Air Waybill rules were meant to rebalance contractual responsibilities between the two parties, but insurers and forwarders are now warning that the changes may have done something far more consequential: shifted legal liability onto the shoulders of freight forwarders in ways that existing insurance policies were never designed to cover.
Matthew Phillips, chief commercial officer at Breeze, a cargo insurer, put it plainly: the revised framework represents a significant reallocation of risk. Traditionally, liability follows control—the party that handles or owns something bears responsibility for it. Under the new rules, forwarders could find themselves legally responsible for matters that have historically belonged to shippers or carriers. The problem is that freight forwarder liability insurance has been built around the risks forwarders actually control: their own errors, omissions, and negligence when arranging transport. It was not built to cover obligations that properly sit with shippers. If the new contractual framework forces forwarders to assume shipper-level responsibilities, the insurance gap could be substantial and dangerous.
The framework arrived after what many in the industry considered an accelerated process. FIATA, the global body representing freight forwarders, formally requested a review and asked that implementation be delayed until October 1 to allow time for legal and operational assessment. The request was denied. FIATA's director general, Stéphane Graber, argued that forwarders could not reasonably accept significant new contractual obligations without legal certainty or a chance to understand the insurance consequences. IATA, the airline trade body, defended the changes, saying the required consultation process had been followed and that the revised rules provided an appropriate rebalancing of benefits and responsibilities. The US Airforwarders Association echoed FIATA's concerns, warning that forwarders should not be expected to assume liability for cargo they neither own, pack, nor control, and advised members to obtain written confirmation from every airline about which contractual terms would apply.
The uncertainty cuts deeper because the changes land against a backdrop of established trading conditions set by the British International Freight Association, which have long been upheld by English and Welsh courts as a reasonable balance between shippers, forwarders, and carriers. Whether that balance holds under the revised DAWB arrangements—particularly around dangerous goods and cargo misdeclaration—remains an open question that will likely occupy UK forwarders and their insurers for months to come.
What happens next depends partly on how insurers respond. Existing freight forwarder policies were designed around a different risk profile. As the market gains clarity on what the new framework actually means in practice, insurers may revise their underwriting standards, policy terms, or pricing. Some carriers have already signaled they do not intend to apply the revised framework immediately, adding another layer of complexity for forwarders operating across multiple airline networks.
Phillips advised forwarders not to wait for the insurance market to catch up. The most practical step, he suggested, is to confirm whether shippers have comprehensive all-risks cargo insurance and, where appropriate, to offer coverage on a shipment-by-shipment basis. That provides immediate protection for cargo owners while reducing uninsured exposure across the supply chain as the industry adapts. For now, UK forwarders in particular should seek written clarification from each airline they work with before accepting shipments under the new terms. The revised framework is in effect, but the real work of understanding what it means—and what it costs—is just beginning.
Citações Notáveis
This represents a significant reallocation of risk. Liability is generally expected to follow control, and the revised framework raises legitimate questions where a freight forwarder could potentially become responsible for matters traditionally associated with the shipper or carrier.— Matthew Phillips, chief commercial officer at Breeze
Forwarders could not reasonably be expected to take on significant new contractual obligations without legal certainty or the chance to assess the operational and insurance consequences.— Stéphane Graber, FIATA director general
A Conversa do Hearth Outra perspectiva sobre a história
Why does it matter where liability sits? Isn't that just a legal technicality?
It matters because liability is tied to insurance. If a forwarder suddenly becomes responsible for something they didn't control, their insurance won't cover it. That's not a technicality—that's a gap that could bankrupt them.
So the airlines pushed this through to protect themselves?
IATA says they followed proper process and that the rebalancing is fair. But FIATA wasn't given enough time to assess the consequences before it went live. That's the real complaint—the speed, not necessarily the direction.
What's the worst-case scenario for a forwarder?
A shipment arrives damaged or misdeclared, and under the new rules, the forwarder is legally liable. But their insurance policy was written assuming the shipper bore that risk. The forwarder pays out of pocket.
Can they just refuse to work under the new terms?
Not easily. If they want to use an airline, they have to accept the airline's terms. That's why they're asking for written confirmation—to at least know what they're agreeing to.
How long until this gets sorted out?
That depends on how quickly insurers understand the practical implications and adjust their policies. In the meantime, forwarders are being told to make sure shippers carry proper cargo insurance. It's a temporary fix while the industry figures out the real cost.