Freight forwarders should review their contractual arrangements and insurance protection following the introduction of IATA's revised Direct Air Waybill framework, according to digital cargo insurer Breeze, which has warned the changes could constitute a significant reallocation of risk from shippers and carriers onto forwarders - including in categories where the loss consequences are severe.
Matthew Phillips, chief commercial officer at Breeze, framed the core legal concern precisely: "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."
The most consequential of those categories is dangerous goods and cargo misdeclaration. Under existing arrangements, responsibility for accurate classification and declaration of hazardous cargo sits with the shipper. If the revised DAWB framework shifts any element of that obligation toward forwarders, the claims exposure changes in kind rather than degree - a misdeclared container carrying undisclosed flammable or explosive materials that causes a fire or structural failure generates a catastrophic loss scenario that existing freight forwarder liability policies, designed around forwarder errors and omissions in arranging transport, were not built to absorb. Whether that boundary has actually moved under the revised framework is precisely the question UK forwarders and their insurers need to resolve before accepting shipments under the new terms.
The revised DAWB framework took effect on July 1 and is intended to rebalance contractual responsibilities between airlines and freight forwarders. Global forwarder body FIATA formally requested a review under the IATA-FIATA Consultative Council mechanism after the changes were adopted through what it described as an accelerated process with limited industry consultation, and asked for implementation to be pushed back to October 1 so the review could conclude. No postponement was granted.
FIATA director general Stéphane Graber said 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. IATA has defended the changes, telling trade press that the required consultation process was followed and that the revised rules provide an appropriate rebalancing of benefits and responsibilities between forwarders and airlines.
The US Airforwarders Association has raised similar concerns, warning that forwarders should not be expected to assume liability for cargo they neither own, pack nor control, and advising members to obtain written confirmation from every airline on which contractual terms will apply before tendering cargo.
The changes land against a backdrop of standard trading conditions set by the British International Freight Association, which underpin most UK forwarding contracts and have previously been upheld by the courts of England and Wales as a reasonable balance between the interests of shippers, forwarders and carriers. Whether that balance holds under the revised DAWB arrangements - particularly around dangerous goods and cargo misdeclaration - is the key question for UK forwarders and their insurers in the coming months.
Existing freight forwarder liability policies have traditionally been designed around risks that forwarders control - their own errors, omissions and negligence when arranging transport - rather than obligations that sit with shippers. If the revised contractual framework results in forwarders assuming responsibilities previously associated with shippers, insurers may review how those risks are assessed, potentially including changes to underwriting, policy terms or pricing as the market gains a clearer understanding of the practical implications.
Breeze is advising forwarders not to wait for the insurance market to catch up. "The most practical step forwarders can take today is to confirm whether the shipper has comprehensive all-risks cargo insurance and, where appropriate, offer cover on a shipment-by-shipment basis," Phillips said. "That provides immediate protection for the cargo owner while helping reduce uninsured exposure across the supply chain as the industry adapts to the revised framework."
Reports from trade press indicate that some carriers do not intend to apply the revised framework immediately, adding a further layer of complexity for forwarders operating across multiple carrier networks. As the market adapts, UK forwarders in particular may want to seek written clarification from each airline they work with before accepting shipments under the new terms.
