Why do I have to mitigate cargo loss?

Loss mitigation, in law, is the principle that a party who has suffered loss must take reasonable action to

minimise the amount of the loss suffered.

If, for example, a consignee receives a shipment of rice which has been partially damaged due to water ingress to the container and transfers the rice into a warehouse without segregating the damaged cargo from the salvageable cargo, the liable for initial damage carrier cannot be called upon to pay for avoidable losses which may not have arose had the cargo been duly segregated.

When cargo is damaged in transit and importer claims looses, shipping line will always challenge cargo receiver’s efforts to mitigate losses.

You must have evidence!

Use simple, workable techniques to prove that receiver duly mitigated cargo losses:

• Cargo segregation,
• Fumigation
• Re bagging,
• Transfer to dry ( cold storage, when appropriate) warehouse,
• Gate out / take delivery from the port within reasonable time,
• Take pictures and videos of container, cargo and seal condition before destuffing commence.

Clients often ask us how far does this ‘duty to mitigate’ go?

Nevertheless legally claimant is obliged to mitigate its loss, it is only obliged to do what is reasonable in the circumstances and can consider its own commercial interest to the extent it is reasonable to do so. It does not have to go beyond what is reasonable and suffer further losses. Common sense prevails!