A shipment leaves an Asian port, crosses the ocean in a container, is transferred to a truck at destination and must reach the client’s factory by a fixed date. If the goods are lost, arrive damaged or arrive late, the business owner’s question is always the same, who compensates me, and does that cover the sales or the production I have lost because the material did not arrive on time?
The answer is rarely intuitive. International transport is not governed by a single rule, but by a mosaic of conventions and laws that change depending on the mode used, and almost all of them share a feature that surprises whoever suffers the damage, namely that they cap the compensation and, as a general rule, leave loss of profit out. Knowing those rules before contracting the transport —and not after the incident— is what makes the difference between recovering the real value of the loss or being left with a fraction.
Two concepts that should not be confused: actual damage and loss of profit
In the law of damages a distinction is drawn between actual damage (the direct loss, the value of the goods destroyed or deteriorated) and loss of profit (the gain that could not be obtained, the contract that could not be fulfilled, the production line at a standstill, the penalty owed to the end client). Article 1106 of the Spanish Civil Code recognises both as recoverable under the general regime of breach of contract.
The problem is that the carriage of goods does not operate under the general regime, it operates under special regimes —mostly of international origin— built on a different idea, which is to make the risk calculable for the carrier, so that it can insure it and pass it on through an affordable freight rate. To achieve this, those regimes fix the compensation per kilogram and, save for exceptions, exclude loss of profit and indirect damages.
The regulatory mosaic: each mode, its rules and its limits
There is no single “transport law”. What applies depends on the mode used in the leg where the damage occurred.
Road. International carriage is governed by the CMR Convention (Geneva, 1956). It establishes a quasi-strict liability of the carrier between receipt and delivery, with a limit of 8.33 SDR (Special Drawing Rights) per kilogram of gross weight of the goods lost or damaged (art. 23 CMR). Domestic Spanish carriage is governed by Law 15/2009 on the Contract for the Land Carriage of Goods (LCTTM), inspired by the CMR itself, with a statutory limit of one third of the daily IPREM per kilogram (art. 57). Its liability rules are mandatory “minimum” rules: they cannot be reduced by contract, but the carrier may voluntarily assume greater liability.
Sea. It is the dominant mode in international trade and the one with the most complex framework. Spanish Law 14/2014 on Maritime Navigation (LNM) refers, for carriage under a bill of lading, to the Hague-Visby Rules (art. 277.2 LNM), which set the limit at the higher of these two amounts: 666.67 SDR per package or unit, or 2 SDR per kilogram of gross weight. Here the so-called “container rule” becomes important: if the bill of lading describes the packages loaded inside the container, each package counts for the purposes of the limit, which can significantly raise the compensation. For traffic subject to the Hamburg Rules, the caps are somewhat higher (835 SDR per package or 2.5 SDR per kilogram). The 2008 Rotterdam Rules, intended to unify the sector, have still not entered into force.
Air. It is governed by the Montreal Convention of 1999. The figure is worth updating: following ICAO’s five-yearly review, the limit for cargo rose from 22 to 26 SDR per kilogram, with effect from 28 December 2024 (the amendment was published in the Spanish Official Gazette of 27 February 2025). It is a good example of how these caps are not fixed: they are reviewed periodically to correct for inflation.
Rail. In the international sphere the CIM Uniform Rules apply (an appendix to the COTIF Convention), with a per-kilogram limit logic equivalent to that of the CMR.
The practical consequence of this mosaic is twofold. First, the economic outcome of one and the same incident can vary greatly depending on the mode. Second —and more important for the business owner— under all these regimes the compensation is calculated on the value of the goods, not on the total commercial loss. Loss of profit, in principle, is not included.
The crux of loss of profit: why it is almost never recovered (and when it is)
Transport regimes compensate what the goods were worth at the time and place the carrier took charge of them. Not the frustrated sale, not the halted production, not the contractual penalty owed to the end client. Those items —loss of profit and collateral damages— fall, as a general rule, outside the capped cover.
There are, however, three ways to overcome that limit:
- Declaration of the value of the goods. If the shipper declares a higher value in the consignment note or the bill of lading and pays the corresponding surcharge (art. 24 CMR and equivalents), the compensation is calculated on that value and not on the per-kilogram cap. It is a decision taken before the transport and one that is usually discarded because of its cost, until the incident occurs.
- Declaration of a special interest in delivery. The CMR (art. 26) allows the interest in a punctual or damage-free delivery to be specifically covered, which opens the door to compensating losses that would otherwise be excluded.
- Wilful misconduct or gross negligence of the carrier. This is the most relevant exception in court. Where the damage is due to wilful misconduct or to a fault equivalent to it under the applicable law —gross negligence— the limits fall away (art. 29 CMR; art. 62 LCTTM; and in maritime carriage where the carrier’s wilful misconduct or gross negligence is present). From that point onwards the general regime of the Civil Code applies again and both actual damage and the loss of profit of article 1106 CC come into play.
That said, proving loss of profit is not automatic even when the door is open. Case law is demanding, the Spanish Supreme Court requires an assessment grounded in reality and endowed with “reasonable likelihood”, excluding doubtful, contingent or merely hypothetical gains (a criterion reiterated, among others, in Supreme Court judgment 637/2018 on vehicle downtime, and in numerous rulings of the Provincial Courts). The burden of proving the gains not obtained lies with the party claiming them, and a trade association certificate or a lump-sum estimate is not enough; concrete evidence is needed —contracts, orders, invoicing history, expert reports— allowing the loss to be quantified with a solid prospective analysis.
Delay deserves a separate mention. When the goods arrive, but late, the compensation regime is even more restrictive: the damage for delay is usually capped at a figure linked to the price of the transport, save for a declaration of special interest or wilful misconduct. For a company working with just-in-time deliveries, this is precisely the scenario in which the real loss (the assembly line at a standstill) is furthest from what the rules recognise.
The added problem of multimodal transport: which regime applies?
The modern international chain is, almost always, multimodal: ship, truck, sometimes plane or train, under a single transport document. The LNM expressly provides for the multimodal transport document (art. 267), but it does not resolve the underlying issue, which is knowing which liability regime governs when the damage occurs in a chain with several modes.
International practice applies the so-called network system, meaning that if the damage can be located in a specific leg, the convention specific to that leg applies (CMR if it was on the road, the Hague-Visby Rules if it was on board the vessel, Montreal if it was in flight). The problem arises with non-localised damage —the goods turn up damaged at the end, without it being possible to determine in which phase it happened—. In those cases the uncertainty about the applicable regime, the limit and the time bar for claiming is at its highest, and how much is recovered depends on it.
Added to that complexity is the difficulty of identifying the party liable:
- The contractual carrier (the one who undertook the obligation towards the shipper) is liable even if it subcontracted performance to third parties.
- In successive carriage under a single contract and a single consignment note, the carriers involved are jointly and severally liable towards the consignee (arts. 34 and 36 CMR; an analogous regime under the LCTTM), which makes it possible to claim against the first or the last one without having to identify exactly which of them caused the damage.
- Freight forwarders and logistics operators occupy a particular position: depending on how the contract was made, they may be liable as mere agents or assume the position of contractual carrier with all its liability. The characterisation of the contract is decisive and should be fixed clearly in writing.
What a company can do to avoid being left halfway
Most losses are decided before the incident, at the contracting and documentation stage. Some concrete measures:
- Consider the declaration of value or of special interest when the goods are of high value or punctual delivery is critical. The surcharge is usually far lower than the potential loss.
- Take out a cargo insurance policy covering the real value and, where possible, consequential losses. The carrier’s insurance does not protect the owner of the cargo: it covers the carrier’s —limited— liability.
- Take care of the documentation: the consignment note or the bill of lading must correctly describe packages, weight and condition of the goods. A good document conditions everything from the container rule to the proof of the damage.
- Observe the time limits for reservations and protests, which are short and whose non-observance may create a presumption of delivery in conformity, and watch the limitation periods for actions (typically one year, extendable to three in the event of wilful misconduct or gross negligence under the CMR).
- Document the loss of profit from the outset: affected orders, penalties borne, production stoppages. If litigation comes, that evidence will decide whether the commercial loss is recovered or not.
Conclusion
When the goods never arrive, the business owner discovers that the “default” compensation rarely covers the real loss, international conventions and Spanish legislation fix the damage per kilogram and, save for wilful misconduct, gross negligence or a prior declaration, exclude loss of profit. In a multimodal chain, moreover, the first battle is to determine which regime applies and against whom to claim. Anticipating at the contracting stage, in the declarations of value, in the insurance and in the documentation is the only way to ensure that, when the problem arrives, the answer to “who is liable?” is also “and how much do I recover?”.
At Navas & Cusí we advise importing and exporting companies and logistics operators on the contracting of international transport and on claims for damage, delay and loss of profit against carriers, freight forwarders and insurers, from our maritime law, regulation and logistics practice area. If your company is facing an incident in the transport chain, we can analyse the applicable regime and the best claim strategy.
