TRANSPORTATION AND LOGISTICS: DIFFERENCES, LEGAL REGULATIONS, AND TYPES OF INSURANCE

Shipping and Transportation 

Shipping and transportation are two concepts that are often confused with each other. Shipping and transportation law is the branch of law that regulates the legal relationships and problems arising during the movement of goods or people from one place to another. This field examines issues such as the rights and obligations between the carrier (service provider) and the sender (sender of goods), and the liabilities arising in case of damage, loss, or delay of the transported goods. In a globalized world, the volume of trade between countries is constantly increasing. Shipping law aims to prevent problems from arising during the execution of these transactions. Transportation contracts prevent potential disputes by clearly defining the rights and responsibilities of the parties.

Transportation is the process of moving goods from one location to another. Generally, transportation involves loading goods onto a vehicle, transporting them to the designated location, and unloading them at the final destination. Transportation is a fundamental element of trade and a crucial part of the supply chain. The goal of transportation processes is to deliver goods safely, on time, and economically to their destination.

Types of Transportation:

1. Road Transportation: This refers to transportation carried out using trucks, trailers, and other land vehicles. It is the most common type of transportation for short and medium distances.
2. Sea freight: This refers to transportation carried out by ships. It is preferred for transporting large and heavy loads. It is one of the most commonly used transportation methods in international trade.
3. Air freight: This refers to transportation carried out by airplanes. It is used for situations requiring fast delivery, but its cost is higher compared to other methods.
4. Rail Transportation: Transportation carried out by trains. It is an economical solution, especially for transporting large-volume loads over long distances.

Stages of the Shipping Process:

1. Loading: The process of loading goods to be transported onto a vehicle or transport vehicle.
2. Transportation: The process of moving goods to their destination.
3. Unloading: The process of taking goods out of the vehicle at the destination.
4. Delivery: The process of delivering the goods to the buyer.

Transportation Management: Effectively managing the transportation process is crucial in logistics and supply chain management. This process involves controlling costs, optimizing delivery times, and ensuring the safety of goods during transport. Elements to consider in transportation management include determining the transportation route, ensuring the suitability of transport vehicles, customs procedures, and insurance.

Shipping Insurance: It is recommended to purchase shipping insurance to protect against potential risks during transportation. This insurance covers damages that may occur during transit, thus securing the goods being transported.

Transportation is an integral part of commerce and daily life. A safe, fast, and cost-effective transportation process enhances the competitiveness of businesses while enabling consumers to meet their needs in a timely manner.

 

Transportation, on the other hand, is a broader system than shipping, encompassing the planning and management of the movement of both goods and people from one place to another. Because transportation activities involve longer distances and are generally national or international, larger vehicles such as trains, ships, and airplanes are used.

Shipping, because it covers shorter distances or is within a specific area, allows for faster delivery. Transportation, on the other hand, involves more extensive and longer-distance services, resulting in longer delivery times compared to shipping. There are also more legal regulations governing transportation. Transportation is a broader concept that encompasses shipping. Both transportation and shipping are subject to the Turkish Commercial Code.

Transportation Contract:

A contract of carriage is an agreement between a carrier and a consignor that specifies matters such as the goods to be transported, the transportation fee, and the delivery time. A contract of carriage is a bilateral agreement that defines the rights and responsibilities of the parties during the transportation of goods or services, imposing mutual obligations on both parties. The parties to these contracts vary depending on the type of contract. If the contract concerns the transportation of goods, the parties are the carrier who will transport the goods and the consignor. If the goods to be transported are passengers, the parties are the passenger and the carrier. Issues such as who will bear the responsibility for damages that may occur during the transportation of goods, services, or passengers, and under what circumstances the carrier will be liable, are regulated by the contract; however, contractual provisions aimed at mitigating or eliminating legally imposed responsibilities are invalid. Concepts related to contracts of carriage:

Transport Document: This document serves as written proof of the transport contract.

Transportation Fee: This is the fee to be paid for transportation.

Delivery Time: The date or period by which the goods will be delivered to the buyer.

Carrier's Liability: The carrier is responsible for the safe transport of the goods.

Procedures in Case of Damage: This is the procedure that the parties must follow in the event of damage or loss of property.

 

Carrier's Legal Liability:

The carrier is obligated to transport the goods safely under the terms specified in the contract of carriage. The carrier is generally held liable for any damage, loss, or delay to the goods. If the carrier fails to deliver the goods or services within the agreed timeframe and cannot prove that the delay was due to force majeure or a cause attributable to the sender or recipient, they may be liable for damages resulting from the delay. The carrier is responsible for any damage that may occur to the goods until delivery is ensured. Legal regulations according to types of carriage:

Road Transport: The CMR convention is the most frequently used convention for international freight transport by road.

Maritime Transport: The Hamburg Conventions are an international agreement regulating the carrier's liability in maritime transport.

Air Transport: The Warsaw Convention is an international agreement that sets out the rules for the carriage of passengers and baggage in air transport.

Rail Transport: The COTIF agreement contains uniform rules for the carriage of passengers and goods by rail.

Potential Problems and Solutions:

Damage to Goods: If the goods are damaged during transport, the sender can file a compensation claim against the carrier.

Loss of Goods: In the event of loss of goods, the carrier is obligated to pay the value of the goods.

Delivery Delay: If the carrier fails to deliver the goods within the time specified in the contract, the sender may claim a penalty.

Customs Procedures: Problems may arise with customs procedures in international shipments. In such cases, customs law comes into play.

Transportation Insurance:

Cargo insurance protects goods against damage, theft, fire, maritime accidents, and other problems that may occur during transport. Cargo insurance can be applied to all types of transportation activities. The types of cargo insurance vary depending on the mode of transport: road transport insurance, sea transport insurance, air transport insurance, transit transport insurance, and rail transport insurance. Cargo insurance provides protection against damage that may occur from the moment of shipment to the moment of delivery. It also helps minimize the financial losses that these damages may cause in international trade. 

Types of Transportation Insurance:

1. Cargo Insurance: This type of insurance covers risks that may occur during the transportation of commercial goods.
2. Freight Insurance: This type of insurance provides protection not only for the goods being transported but also for any damage to the vehicle responsible for transportation (e.g., ship, truck).
3. Carrier Liability Insurance: This type of insurance protects the transportation company from liabilities in the event of damage to the transported goods.

Coverage of Transportation Insurance:

• Complete Loss: The total loss or destruction of property.
• Partial loss: Damage to a portion of the property.
• Damage: Damage to goods during transport.
• Theft: Theft of goods during transport.
• Natural Disasters: Damage caused by natural disasters such as earthquakes, floods, and fires.

Things to Consider When Purchasing Car Insurance:

• The breadth of insurance coverage and the risks it covers.
• Deductible rates included in the policy.
• Transportation time and the value of the goods being transported.
• The insurance company's reliability and speed of payout.

Cargo insurance is of great importance, especially when transporting valuable or fragile goods, and helps to secure commercial operations.

 

Law Student Intern

Nursena Ibanoglu