Equipment damaged in storage raises issues of warehouse liability

When in doubt – insure! That is the advice from lawyers and industry experts when it comes to storage and transport of cargo. According to Shane Dwyer, partner in maritime law firm Shepstone & Wiley, the security for consumers when storing goods in warehouses or moving their cargo lies in insuring their goods well. “It is very important to ensure you have the best possible coverage – even if it means paying more,” says Dwyer. “Do not take risks and do not be too cautious but rather see to it that you have the best possible insurance to cover any eventuality.” This follows a recent incident involving a former Cape Town resident who found his cargo badly damaged on arrival at his new home in Windhoek after months in storage. “The goods went into storage in February as we were going to emigrate to Australia. We then decided to move to Windhoek instead and contracted a haulier to collect our goods at the warehouse and deliver to us. Upon delivery I found my metal and woodworking machinery had got wet and had severe rust, while it appeared as if the wood saw and planer had been extensively used,” Dean van Tonder told FTW. The warehouse owner can verify that when the goods left his premises for transportation to Windhoek, inventories showed there was no damage to the goods while the haulier has also denied any damage occurred, leaving Van Tonder to rely on his insurance company. Says Dwyer: “The reality in South Africa is that there is little protection for the consumer but that is set to change as new legislation comes into effect. Warehouse owners have been saying ‘store at your own risk’ while transporters say ‘transport at your own risk’, effectively contracting themselves out of any liability thanks to their terms and conditions.” Dwyer says it is all about sharing the risk. “New legislation is going to force the warehouse owner, storage company and transporter to share the risk with the consumer and take responsibility for their involvement in the process.” Comparing it to the shipping industry, where shipowners originally also had no responsibility, insuring is the only safe option. “In the shipping industry there was much the same problem but legislation was put in place to ensure that a shipowner cannot just contract himself out of any liability and they now have an obligation to provide safe carriage. Obviously in that he has several defences such as insufficient packaging or bad weather that can be used if the cargo is damaged, but essentially it is a sharing of the risk. Liability now lies with all the parties involved. Using these new conventions, a shipowner is obligated to move cargo safely and takes responsibility for that.” According to Van Tonder, this has been one of his major problems as he claims no-one wants to take responsibility for his damaged machinery. “There is a clear paper trail of all the movements of this equipment, so somebody must be accountable for this and accept responsibility,” he says. One warehouse owner, who preferred to remain anonymous, said cargo naturally deteriorated in storage. “Storing at the coast will inevitably mean there is oxidation and levels of rust will be found. Our terms and conditions take all of this into account and we can’t and won’t carry the risk of damage while in storage.” Most warehouse owners agree there is always a degree of risk in longterm shortage and definitely an inherent risk in moving cargo – a risk that should be carried by the customer and his insurance. “There is no morality involved here – the reality is the customer or consumer according to the law carries the risk and the standard trading conditions do contract out a large chunk of liability for the company involved. For that reason insuring for catastrophe is crucial,” says Dwyer.