Who Is Responsible When Cargo Is Damaged During Transit?

When cargo arrives damaged, the first question most shippers ask is simple: Who is responsible?
In reality, that question is often asked too late — and framed the wrong way.

Most cargo damage disputes don’t happen because rules are unclear. They happen because responsibility was assumed instead of defined. In international shipping, responsibility depends on when and where the damage occurs — not who paid for shipping, and not which Incoterm was written on the contract.

Understanding this distinction is the key to knowing whether compensation is possible — and why so many claims fail.

Why “Who Is Responsible?” Is the Wrong First Question

After damage is discovered, sellers often look for a single party to blame: the supplier, the freight forwarder, the carrier, or even Amazon. But responsibility in international shipping doesn’t sit with one party throughout the journey.

It shifts by stage.

This is why disputes escalate so quickly. By the time damage is visible, the shipment may have already passed multiple responsibility transfer points. Without clarity on where the damage occurred, there is no clear answer to who should be responsible.

This stage-based logic is explained in detail in risk transfer in international shipping, but it becomes most critical when something goes wrong.

Cargo Damage Responsibility by Shipping Stage

The same damaged carton can lead to very different outcomes depending on when the damage happened.

Before Pickup or at the Factory

If cargo is damaged before it leaves the supplier’s facility — poor packaging, incorrect palletization, or internal handling — responsibility usually remains with the seller or manufacturer.

At this stage, cargo insurance often has not yet attached, which means damage discovered later may not be insurable even if insurance was purchased.

During Inland Transport to the Port

Once goods are collected and moved domestically, responsibility typically shifts to the party arranging transportation. Damage here is often blamed on “the forwarder,” but legally it may sit with a subcontracted trucking carrier.

This is a common gray zone where liability exists, but compensation is limited or delayed.

At the Port or During Loading

Damage during container loading, terminal handling, or port operations is notoriously difficult to assign. Multiple parties are involved, and documentation is often incomplete.

When responsibility is not clearly defined before shipment, this is where disputes begin — and where many claims quietly die.

During Ocean or Air Transit

When cargo is damaged during international transit, responsibility usually falls under carrier liability. However, carrier compensation is strictly limited by international conventions and rarely reflects the actual value of the goods.

This is why many shippers are surprised to learn that even when the carrier is “responsible,” recovery can be minimal.

After Arrival and Last-Mile Delivery

Once cargo arrives at destination and clears customs, responsibility may shift again. Damage discovered during final delivery often leads to finger-pointing between the carrier, the forwarder, and the consignee.

Without clear documentation, responsibility becomes difficult to enforce.

At the Amazon FBA Warehouse

For Amazon sellers, this is a critical misunderstanding. Amazon reimburses inventory loss — not international transport risk.

If damage occurred before Amazon officially received the goods, reimbursement is unlikely, even if the damage is only discovered at the warehouse. This distinction explains why many FBA damage claims are rejected.

What Incoterms Decide — and What They Don’t

Incoterms are often treated as a shortcut answer to responsibility, but this assumption causes more confusion than clarity.

Incoterms define when risk transfers — not who will compensate you when damage occurs.
They do not guarantee payment, insurance coverage, or successful claims.

This is why relying on Incoterms alone, without understanding the underlying responsibility structure, leads to failed expectations. A deeper explanation is covered in risk transfer in international shipping, but in practice, Incoterms are only one piece of the responsibility puzzle.

When Cargo Insurance Covers Damage — and When It Doesn’t

Cargo insurance is often expected to solve responsibility disputes. In reality, many claims are denied for predictable reasons:

• Damage occurred before insurance attachment

• Improper packaging exclusions

• Late or incomplete documentation

• Assumed coverage under DDP terms

This is why “having insurance” does not always mean “being covered.” A more detailed breakdown of coverage expectations is explained in freight insurance for Amazon and B2B shipments, including when insurance actually applies.

Amazon FBA Damage: Liability vs Reimbursement

Amazon’s reimbursement policies are often misunderstood as a safety net for international shipping damage. They are not.

Amazon reimburses inventory loss — not international transport risk.

Amazon assumes responsibility only after inventory is officially received and logged. Damage that occurred earlier remains outside Amazon’s liability, regardless of when it is discovered.

This disconnect is one of the most common reasons sellers believe someone “should pay,” but no party does.

How to Avoid Responsibility Disputes Before Shipping

Most cargo damage disputes are preventable — but only before shipment begins.

Clear responsibility definition, correct insurance attachment timing, aligned documentation, and realistic expectations about Incoterms all reduce the risk of unresolved claims.

A freight forwarder’s real role is not simply booking space, but structuring responsibility before cargo moves, so that when something goes wrong, accountability is already clear.

Final Thought

When cargo is damaged during transit, the answer to “who is responsible” is rarely simple — and never universal.

Responsibility follows stages, not assumptions.
And understanding where risk actually transfers is the difference between recoverable damage and a total loss.