With daily news coverage on the European migrant crisis and its humanitarian and economic impact, the issue of illegal immigration and clandestine entry is firmly in the public conscience. There has been an unprecedented increase in migrants attempting to cross the Channel this year with thousands camped in Calais and Coquelles, waiting for an opportunity to reach the UK, whether via the ports or the Channel Tunnel. With most cargo carried into the UK via these French ports, Adrian Marsh takes a look at the impact this has had on retailers, wholesalers  and manufacturers and their supply chains.

The extent of the problem

To tackle clandestine entry, extra measures such as security checks at border crossings and improved physical security at the Eurotunnel terminal are being employed. UK Border Force and the French authorities have prevented more than 39,000 attempts to cross  the Channel illegally in 2014/2015 and the Eurotunnel alone has blocked 27,000 attempts since January.

The potential for physical damage and contamination to goods by clandestine entry into a trailer is clear and the extra measures in place may reduce the risk. However, with these extra measures come extra delays in transportation time which is impacting upon cargo interests’ supply chains and in some cases resulting in the loss of goods. The problem has recently been further exacerbated by the temporary closure of the Eurotunnel and the actions of the striking French dockworkers.

Legal position

Deliveries can be affected in one of three ways: delay to the supply chain, reduced quality of goods or contamination. Cargo interests (and their insurers) who suffer may wish to consider recourse against their hauliers. However, any such recourse is not clear cut and cargo owners should be aware that they may not be able to recover their full losses in any event.

Delay in delivery

Cargo interests must establish either that the duration of the transit was unreasonable in all of the circumstances or that the haulier failed to comply with an agreed delivery date and further,  that the delay caused financial loss. Given the situation faced by hauliers  at the French border crossing, it is perhaps unlikely that liability will attach if the delays were unavoidable. However, even if cargo interests can establish a claim against the haulier on the face of it, that claim will be limited, under Article 23(5) of the Convention on the Contract for the International Carriage of Goods by Road 1956, to the haulier’s carriage charges.

Quality of goods

Delay in delivery of perishable goods, such as fresh produce, could lead to a shortened shelf life or a significant reduction in the quality of the goods. This may be treated as damage and the limitation for delay under Article 23(5) may not apply, rather damages will be calculated based on the market value  of the goods at the time of collection, subject to a limitation of liability under Article 23(3) of CMR, calculated at the rate of 8.33 SDRs per kilo.

Contamination

Problems also arise where migrants manage to enter the freight vehicle. The breaking of a security seal or TIR cord and clandestine entry into a vehicle carrying cargo intended for clinical use or human consumption, such as medical devices, pharmaceuticals  or foodstuffs, often leads to the immediate rejection of the entire load. Cargo interests, mindful of brand issues and the strict regulatory framework, are not usually prepared to take any risk, given the potential for contamination.

However, the rejection of cargo in the absence of evidence of contamination or physical damage often leads to disputes between cargo interests and their logistics providers, who are only liable for the diminution in value of the cargo caused by damage (i.e. adverse physical change) during the transit. Claims arising out of cargo destroyed as a result of a risk of contamination are likely to be rejected by hauliers and their insurers on the basis that the cargo was destroyed as a result of a fear of loss/damage and not as a result of actual loss or damage.

Recap - where does this leave importers?

To successfully claim against the haulier, cargo interests must first establish that the cargo has actually suffered damage or contamination. In a claim for delay only, losses will be limited to the carriage charges.

Cargo owners (and their insurers) would be well advised to appoint a surveyor at the earliest opportunity to inspect the cargo and identify any evidence of damage or contamination. A joint inspection with the haulier’s appointed surveyor is preferable as it may avoid arguments at a later date over the condition of the cargo.

However, whilst an inspection of the cargo may help cargo interests to mitigate any loss and identify/evidence any damage or contamination, it is unavoidable that some cargo owners will feel that their commercial interests and duty to their customers remains best served by rejecting the entire load. An inspection may not completely discount the risk of contamination and consumers would not wish to consume food or pharmaceuticals which have been carried in a vehicle for several days with numerous stowaways.

Clandestine migration attempts have been a very real issue for hauliers, insurers and importers for many years, and will continue in the future. While there are avenues of recourse to help cargo interests limit the impact of the financial losses, these are unlikely to place them in a neutral position. Early consideration must be given to the best way of mitigating this situation taking into account both the legal and practical realities.