The Age-Old Question Revisited: When Is A Container Considered A Package Under COGSA?

Christopher R Nolan is a partner and K. Blythe Daly is an Associate both in our New York office.

Just when we thought the question of "What Is a Package?" had been addressed ad nauseum, the United States District Court for the Southern District of New York took another look at the issue.

The Carriage of Goods by Sea Act (COGSA) applies to carriage of goods to or from ports in the United States. Clause 4(5) of COGSA provides "[n]either the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package ..., or in the case of goods not shipped in packages, per customary freight unit...."¹ This provides a statutory minimum but parties are free to negotiate for higher coverage; most cargo interests opt to obtain insurance instead.