Privity and Subcontracting in Multimodal Transport — Diverging Solutions

Abstract

When cargo owners engage transport intermediaries to arrange the logistics of carriage, these intermediaries regularly issue multimodal bills of lading and subcontract the actual carriage. This creates a gap in contractual privity between cargo owners and the actual carriers, which can affect the downstream subcontractors’ ability to enforce their standard terms against the cargo owners. While this is an international commercial problem, even among the major common law traditions courts have reacted with remarkably varied solutions. Courts in England and the broader Commonwealth have addressed the problem through a bailment framework, while courts in the United States have utilized a form of agency reasoning. This article examines these varying approaches and compares the innovative ways in which courts have responded to the challenges of multimodal subcontracting in international cargo transport.