Logistics agreements, responsibilities and permits
Many kinds of agreements, responsibilities and permits are related to logistics, particularly transport. Commercial agreement is the most essential agreement, which guides drawing up other agreements. If goods are damaged in transport, the agent in the supply chain that held the goods as they were damaged is usually responsible. Take out insurances to prepare for damages during transport.
A commercial agreement determines the goods, price and terms of payment that the trade concerns. This also includes agreeing on issues related to delivering the goods, including the practices concerning packing, inspection and provision of information.
A commercial agreement often includes a delivery clause, which specifies the division of responsibility in logistics between the seller and buyer. Delivery clauses include Finnterms 2001 in domestic trade and Incoterms 2010 in international trade. Among other things, the clauses determine the division of costs and the transfer of risk between the seller and buyer.
The seller and buyer must also prepare other, separate agreements with different agents. The commercial agreement guides drawing up the agreements.
For example, a transport contract determines matters related to the transport of goods and responsibilities of the carrier. Insurance contracts insure the goods or the carrier’s responsibility for the goods. A shipping agreement includes agreeing on the details of shipping. You may also draw up a separate agreement on managing export and import formalities.
The responsibility for goods during transport is divided based on laws, agreements and contract terms. For example, the Finnish Act on Contracts for Carriage of Goods by Road (tiekuljetussopimuslaki) is applied in domestic and international road transport, the Hague–Visby Rules in international carriage of goods by sea and the NSAB 2015 Clauses in Nordic freight forwarding. The parties to a trade often agree on the division of risks with a supply article included in the commercial agreement.
Each actor in the supply chain is partly responsible for delivering the goods to their destination in one piece.
The shipper is responsible for damage if package markings are not in order or if the goods have been incorrectly packed.
The carrier is responsible for the goods during transport. However, the carrier may be released from its duty if the damage is caused by an error made by the shipper or receiver or conditions independent of the carrier.
The receiver is responsible for damage if it fails to inform the carrier of it in time.
Other actors in the delivery chain, such as a port operator, are usually responsible for damage that has occurred while they have been holding the goods.
If your company is shipping or receiving goods and does not manage transports on its own, it does not have to take out insurances for transport. If your company’s goods are damaged during transport, you will be paid compensation based on the carrier’s cargo liability insurance of the carrier, warehouse keeper, freight forwarder, stevedore or value added service provider. The agent that held your goods when the damage occurred is usually responsible for the damage.
The carrier's cargo liability insurance will not always suffice to cover all costs resulting from the damage. If necessary, you may insure your transported goods with a goods in transit insurance. You may also get a goods in transit insurance if your company is personally taking care of the transport.
The contents of the goods in transit insurance vary based on each case. For example, you may insure transports concerning domestic sales and purchases, or import and export. The insurance may also cover transport concerning subcontracting, maintenance, repairs or exhibitions. Choose either an annual insurance or insurance for a single shipping transaction. Pay attention to the insurance coverage.
Your company will typically need a freight transport permit if you are transporting goods on a road against payment on a vehicle or a combined vehicle that weighs over 3,500 kilograms. The requirement for a permit concerns the company taking care of the transport, not the shipper or receiver of the goods.
The freight transport permit types include community licence and domestic freight transport permit. The community licence allows engaging in freight transport in Mainland Finland and other EAA states. Domestic freight transport permits are only granted to current permit holders.
A freight transport permit is granted to either companies or individuals. The permit is always granted to a specific transport operator and you may not transfer it to someone else. It is valid for ten years. The Finnish Transport and Communications Agency (Traficom) grants freight transport permits.
If you are engaged in professional freight transport with a vehicle or vehicle combination over 2,000 kg but below 3,500 kg, you must file a notification with the Finnish Transport and Communications Agency.
Transports above the limits permitted for the size and weight of freight transport also require a special transport permit.
Separate statutes and regulations also apply to the transport of dangerous substances. For example the driver must have an ADR driving permit.