Remember the Evergiven choking the Suez Canal? Cargo owners worldwide suddenly discovered what “general average” really meant when they received unexpected nine-figure bills. The Strait of Hormuz tensions? Shippers learned the hard way how “matters affecting performance” Bill of Lading clause can strand their goods indefinitely with zero carrier liability.
These aren’t theoretical risks buried in legal fine print. A standard bill of lading clause can silently transfer millions in liability directly to you.
The 4 Bill of Lading Clauses That Can Bankrupt Your Shipment
(Spoiler: All BL terms matter, but these four are financial landmines)
Review these with your legal team and ensure your insurance actually covers these hidden liabilities. Because the next crisis isn’t a question of “if”, it’s “when”, and whether you’ll be protected or exposed.
1️⃣ General Average Clause
Real-world trigger: The Evergiven Suez Canal disaster
What It Means: When a vessel faces danger requiring extraordinary expenses to save the ship and cargo, ALL cargo owners (even those whose goods weren’t sacrificed) plus the ship owner must share the financial loss proportionally based on cargo value.
Your Exposure:
❌ Unexpected costs running into six or seven figures
❌ Cargo held hostage until you post security or pay your share
❌ Weeks or months of delays while average adjusters calculate contributions
❌ Cash flow crisis from sudden, unbudgeted expenses
🛡️ Protection: General Average insurance coverage is essential, not optional.
2️⃣ Matters Affecting Carrier’s Performance
Real-world trigger: Strait of Hormuz crisis
What It Means: This clause gives carriers sweeping authority to:
– Deviate from agreed routes
– Delay delivery indefinitely
– Alter service terms
WITHOUT being liable for breach of contract
Your Exposure:
Cargo destined for Jebel Ali gets delivered to India instead. You absorb:
💸 Demurrage charges
💸 Lost sales and penalties
💸 Production line shutdowns
💸 Customer relationship damage
Limited to zero recourse when carriers invoke this clause.
🛡️ Protection: Time-sensitive cargo strategies and contractual safeguards are critical.
3️⃣ Both-to-Blame Collision Clause (BIMCO)
The hidden liability landmine
What It Means: If your carrier’s ship collides with another vessel and both share fault, YOU (the cargo owner) can be held financially liable for the carrier’s portion of damages to the other ship.
Your Exposure:
🎯 You had zero control over navigation
🎯 You’re financially responsible anyway
🎯 Standard cargo insurance may not cover this
🎯 Potentially millions in unexpected liability
🛡️ Protection: Verify your policy explicitly includes both-to-blame collision coverage.
4️⃣ Carriage Affected by Condition of Goods
The carrier’s escape hatch
What It Means: Carriers can refuse, reroute, or destroy your cargo if they deem it poses risks due to:
– Improper packaging
– Hazardous classification issues
– Perishability concerns
– Potential damage to other goods
You remain liable for ALL resulting costs and damages.
Your Exposure:
🔥 Cargo rejection at port
🔥 Destruction of goods at your expense
🔥 Additional rerouting fees
🔥 Liability for damage to other shipments
🔥 Complete loss with zero compensation
🛡️ Protection: Meticulous packaging, labeling, and documentation are non-negotiable.
Conclusion
Your Action Plan
Recent container shipping disruptions have proven these clauses are active financial threats that can materialize overnight. Have your legal team audit every bill of lading clause for hidden liability transfers? Does your insurance explicitly cover all clauses above?
Don’t wait for another disruption to learn this lesson the expensive way. The question isn’t whether these clauses will be invoked, but whether you’ll be the cargo owner who’s protected or the one writing the check.
Do not believe that the 4 critical BL clauses we identified are the only potential cause of threat!
Article written in collaboration with Luc Portier.
Luc is a former CMA-CGM executive with over 40 years of experience in shipping. He has spent 15 years in Line Management (South America, Transatlantic) and 15 years in charge of Strategic Research and Studies for the Presidency and the General Management of CMA-CGM.
Luc is a veteran of the industry, he has lived all major changes that transformed shipping in the last decades: containerization, end of maritime conferences, concentration, stronger environmental regulations, etc…
Having worked closely with the top 10 operators (and many others), Luc has a broad vision of the shipping ecosystem and a perfect knowledge of the trends shaping this market.
