Ercüment Erdem Att. Duygu Oner

Freight Forwarder Contract under Turkish Law

September 2020

Introduction

Parallel to technological developments, the rapid development of production and trade life inevitably increased the need for transportation activities and caused the emergence of new actors in this field. A freight forwarder is one of the indispensable actors of carriage that emerges within the framework of this need. 

The product being the subject of commercial activity also requires its displacement. In this respect, in addition to the actual displacement of the goods, it may be necessary to carry out operations related to carriage, such as storage under appropriate conditions, customs clearance, loading on to the transport vehicle, stowage, etc. Since the manufacturer / seller of the product subject to sale usually does not have the knowledge and experience in performing the said operations, it consults with parties who have expertise in this field in order to transport the product as soon as possible, with the least cost, and to perform other operations related to transportation. This person, whose expertise is consulted, is usually not the person who will undertake the carriage personally, but the freight forwarder who organizes the carriage and the processes related to carriage.

Liabilities of the Freight Forwarder within the Framework of the Concept of Carriage

The provisions regarding the freight forwarder are regulated between Articles 917 and 930 of Turkish Commercial Code numbered 6102 (“TCC”). Pursuant to Article 917 of the TCC, under the freight forwarding contract, the forwarder undertakes to have goods carried at an agreed fee. The party on the other side of the contract, and referred to as the "consignor" in the TCC, is defined as the person who appoints the forwarder for the purpose of having the goods carried, and undertakes to pay the fee agreed upon in the contract.

Under the freight forwarding contract, the forwarder undertakes to have goods carried, not to carry them, personally. What should be understood from the expression, "have the goods carried," is the organization of the carriage. In this context, the forwarder is obliged to determine the transport modes and transportation route, to appoint the carrier or carriers to perform the actual carriage, to make the required contracts of carriage, warehouse, and freight forwarding, to give required information and instructions to the carrier or carriers, and to secure the rights of the consignor as to compensation.

Furthermore, fulfillment of performances like insurance, packaging, marking and clearance of the goods agreed upon for carriage, are within the scope of the obligations of the freight forwarder. Under the freight forwarding contract, unless otherwise provided, the freight forwarder is obliged to make required agreements for the fulfillment of these performances.

Pursuant to Article 918 of the TCC, the freight forwarder makes required agreements in his own name. In this context, it is accepted that an indirect representation relationship has been established between the consignor and the forwarder. If authorized by the consignor, it makes the relevant agreements on behalf of the consignor. In this case, the freight forwarder will directly represent the consignor. It is significant in terms of who will be deemed liable to the carrier under the carriage contract and on behalf of whom (forwarder or consignor) the contract of carriage is to be made between the forwarder and the carrier.

The freight forwarder is obliged to protect the benefits of the consignor and obey the instructions of consignor while carrying out its duties.

Undertaking the Carriage of Goods by the Forwarder

The freight forwarder may undertake to perform the carriage of the goods. If it uses this right, the forwarder is considered as the carrier in terms of the rights and obligations arising from the carriage. In this case, in addition to the fee to be requested for its activity, the forwarder may demand its ordinary carriage fee.

In a similar way, if an amount, including the transport expenses, is determined as a lump sum, the freight forwarder acquires the rights and obligations of the carrier concerning carriage. The fee may be separately determined with respect to the forwarding, or it may be decided as a lump sum price that includes the carriage fee.

Forwarder’s Right to Lien

Pursuant to Article 923 of the TCC, the freight forwarder has right to place a lien on the goods for all kinds of receivables arising from the freight forwarding contract. The right to place a lien may be defined as a right in rem, which gives the creditor the right to refrain from returning a property belonging to the debtor, and to convert the receivable into monies for collection, in the presence of certain conditions.

Debts of the Consignor under the Freight Forwarding Contract

Under the freight forwarding contract, the main debt of the consignor is to pay the agreed upon fee in the contract. The freight forwarder is also entitled to charge the expenses. The expenses arise as a result of the activities carried out by the freight forwarder for the carriage of goods specified in the freight forwarding contract, and also covers additional charges, such as carriage, warehouse and clearance of goods, as well as insurance expenses.[1] As well, the consignor is obliged to perform packaging, mark the goods, provide the required documents, and give the required information to the freight forwarder for the forwarder to fulfill its performances, if required. Another obligation of the consignor is to compensate the freight forwarder for any damages due to non-performance of the contract.[2]

Liability of Freight Forwarder

The freight forwarder is liable for the damage or loss of the goods in its possession. In order for the forwarder to be held liable for these damages, the event that causes the damage must occur while the property is in the possession of the forwarder. Even if the damage occurs later, if the event that causes the damage occurred while the property was in the possession of the forwarder, the freight forwarder is, again, liable for the damages.[3] If damage or loss of the goods occurs while in possession of the carrier, the forwarder should not be held liable. The freight forwarder is liable for losses not arising from the loss and damage of the goods in its possession, only if it breaches one of its obligations pursuant to Article 918. If loss cannot be prevented despite the due attention of the prudent merchant, the freight forwarder is released from liability. If loss is caused by an act of the consignor, or a special defect of goods, it is taken into consideration to what extent these facts are effective in the realization of the obligation of indemnity and determination of its scope.

Conclusion

Since the freight forwarder, who organizes the carriage and the processes related to carriage, is a commercial actor frequently consulted in both the national and international transportation field, the rights and obligations of the parties with the freight forwarding contract are specifically regulated in the TCC. With the relevant provisions, the rights and obligations of the forwarder are regulated independently from the carrier, and the rules that must be applied to the relationship between the consignor and the forwarder have, thus, been clarified.

[1] Akdeniz, Umut: Taşıma İşleri Komisyonculuğu Sözleşmesi, Adalet Yayınevi, Ankara 2013, 1st ed., p. 93.

[2] Akdeniz, p. 100.

[3] Akdeniz, p. 109.