The container opens and something is wrong — crushed cartons, rust, water staining, a load that shifted, or units short against the packing list. What happens next is decided almost entirely in the first few hours, and most importers spend those hours unloading instead of documenting. This article is for companies importing FCL and LCL from China and sets out who can be liable, what each route requires, and the deadlines that quietly expire while you are still negotiating with your supplier.
First: three different defendants
Damage looks the same from the outside, but the responsible party depends on where and why it happened:
- The carrier — damage during carriage: rough handling, poor stowage, water ingress through a defective container, a container dropped.
- The insurer — under your cargo policy, which may respond regardless of fault and is usually the only route that pays close to full value.
- The factory — damage that was built in before the doors closed: inadequate packing, poor lashing inside the container, rust from an untreated surface, wrong dunnage.
Establishing which one applies is not a formality. Claim against the wrong party and you spend the deadline for the right one.
The first 72 hours: capture evidence or lose it
Do this before unloading gets underway, not after:
- Photograph the container sealed, showing the seal number legibly, before anyone breaks it. Compare against the seal number on the bill of lading — see the bill of lading explained.
- Photograph the doors on opening, before any cargo is touched. The stow pattern is evidence of how it was loaded.
- Photograph damage in situ, wide and close, with the container walls visible for context.
- Note the condition of the container itself — holes, dents, previous repairs, wet interior, missing vents.
- Record any observations on the delivery receipt before signing. A clean signature on a delivery note is a statement that the goods arrived in apparent good order, and it is used against you later.
- Do not discard damaged goods or packaging. They are the evidence, and both insurer and carrier may want to inspect.
- Call for a survey where the value justifies it. An independent surveyor's report carries weight that internal photographs do not.
The deadlines that expire quietly
Carriage by sea runs on short clocks:
- Written notice of loss or damage is typically required within three days of delivery for damage that was not apparent at the time — and immediately where it was apparent. Miss it and you face a presumption that the goods were delivered in good condition.
- The time bar for suing the carrier is one year from delivery under the Hague-Visby framework. Not one year from when your lawyer got involved. Bills of lading may specify shorter periods for commencing arbitration, so read the one you hold.
- Insurance policies impose their own notification periods, often shorter than the legal ones.
Notify in writing, to the carrier and to the insurer, immediately and in parallel. Notification is not a claim, it costs nothing, and it preserves your position while you work out what actually happened.
Why the carrier will not pay your invoice value
This surprises importers every time. Carrier liability is limited by convention, not by the value of your goods. Under the Hague-Visby Rules the cap is 666.67 SDR per package or unit, or 2 SDR per kilogram of gross weight of the goods lost or damaged — whichever is higher.
For dense, low-value cargo the weight limit may cover you. For light, high-value cargo it will not come close. A pallet of electronics worth tens of thousands can be limited to a few thousand, and there is nothing unusual or improper about that — it is how the liability regime is designed.
Two practical consequences:
- The "package or unit" definition matters enormously. Whether the unit is the container, the pallet or the individual carton can change the cap by an order of magnitude, and it depends on how the packing was described on the bill of lading — which is another reason the packing list has to be accurate.
- Insurance is not optional for valuable cargo. It is the only route that pays commercial value, and the cover levels differ sharply — the ICC clause structure is in cargo insurance for China imports.
When it is the factory's fault
A large share of "shipping damage" is actually packing failure, and the signature is visible in the pattern: crush damage concentrated at the bottom tiers means the cartons could not carry the stack; rust on steel means no VCI or desiccant; a shifted load means no dunnage or lashing; mould means moisture the packing never addressed. The prevention side is covered in packing for sea freight: moisture, mould and pallets.
Against the factory you are in contract, not convention, so what you can recover depends on what you agreed. This is why packing specifications, drop-test requirements and a defined liability for packing failure belong in the order documents — see the technical spec sheet and what a contract with a Chinese factory must contain. Leverage is also practical: an unpaid balance, or a next order, achieves more than a legal letter to a company in another jurisdiction.
General average: the one that catches people out
If the vessel suffers a casualty and general average is declared, every cargo owner contributes proportionally to the costs of saving the voyage — even if your container is untouched. Cargo is typically not released until security is provided. Insured cargo has this handled by the policy; uninsured cargo owners have to post it themselves, which has ruined more than one importer's quarter.
A working sequence
- Photograph and document before unloading
- Note exceptions on the delivery receipt before signing
- Notify carrier and insurer in writing within days, in parallel
- Commission a survey where value justifies it
- Establish the cause — carriage, packing or loading — from the damage pattern
- Quantify: invoice value, freight, duty, disposal and rework costs — see landed cost
- Pursue the insurer for value, the carrier within the cap, and the factory under contract, in whichever combination the cause supports
- Fix the underlying cause in the next order's packing specification
The evidence that decides a cargo claim exists for about an hour, in a yard, before anyone has decided there is a claim. Everything after that is arguing about photographs that either were or were not taken.
Handling claims and preventing them
We document arrivals, notify carriers and insurers within the deadlines, arrange surveys, and read the damage pattern to establish whether the cause was carriage, loading or packing — then rewrite the packing specification so the same batch does not arrive damaged twice. Seven years and 3,500+ deliveries — real projects are in our case studies.
See cargo insurance and logistics from China.
