Transport contract: freight and carriage of goods

Every day, large quantities of goods are transported around Denmark and across Europe's borders. Behind every consignment, from a parcel of machine parts to a full truck of food, there should be a clear written agreement: a transport contract.

A transport contract sets out the terms for the carriage of goods: who transports what, when, at what price, and who bears the liability if something goes wrong. Without a clear agreement, disputes easily arise about the liability for damaged or delayed goods.

What is a transport contract?

A transport contract (freight agreement) is an agreement between a sender and a carrier for the carriage of goods from one place to another in return for payment of freight.

The agreement governs:

• The nature, quantity and packaging of the goods
• The pick-up and delivery location
• The time of delivery
• The freight price and payment terms
• The allocation of liability on loss, damage or delay

Transport contract vs. consignment note

A consignment note (typically a CMR consignment note for international road transport) documents the specific consignment and accompanies the goods. A transport contract is the underlying framework agreement that governs the ongoing transport relationship. Many businesses have a framework transport contract with their regular carrier or freight forwarder and use consignment notes for the individual consignments.

The legal basis for transport in Denmark

Road transport

The carriage of goods by road is governed by the Freight Agreements Act (the Act on freight agreements for international carriage of goods by road, also called the CMR Act). The Act implements the CMR Convention in Danish law and applies to both international and domestic road transport. The rules on the carrier's liability are mandatory for international transport, so the parties cannot agree terms worse than those the Convention provides.

Sea transport

The Merchant Shipping Act applies to sea transport, including the Hague-Visby Rules for bill-of-lading-based transport.

Air freight

The Montreal Convention (1999) applies to international air freight and sets limits of liability.

Combined transport

NSAB 2015 (the Nordic Freight Forwarders' Association's General Conditions) is widely used in the Nordic countries, among other things for forwarding and combined transport.

What should a transport contract contain?

1. The parties' identification

The carrier's and sender's full company name, CVR number, address and contact details.

2. Description of the goods

A precise description of the goods is decisive:

• The nature and designation of the goods
• The number of packages and the packaging
• The gross weight and dimensions
• Any hazard classes (ADR classes for dangerous goods)
• Special properties (temperature requirements, fragility)

3. Pick-up and delivery

• The pick-up and delivery address
• The time window for pick-up and delivery
• Requirements for a receipt on handover and receipt
• Consequences of delay

4. Freight price and payment

• The price structure (fixed freight, per kg, per km)
• Surcharges for dangerous goods, heavy lifts or extraordinary zones
• The billing interval and payment deadline
• Interest on late payment

5. The carrier's liability

Loss: In international road transport, the compensation is limited to at most 8.33 SDR per kg of the missing gross weight (the CMR Convention).

Damage: Compensation for the reduced commercial value, within the same limit.

Delay: The compensation is limited to the freight amount.

Grounds for exemption:

• The sender's faulty packaging or incorrect addressing
• Defects in the goods themselves
• Circumstances the carrier could not avoid (force majeure)

6. Insurance

The carrier's liability under CMR does not always cover the full commercial value of the goods. Clarify who takes out cargo insurance, which is especially important for high-value goods.

7. Complaint deadlines

For international road transport, the CMR Convention's deadlines apply:

• Visible damage: a complaint on delivery
• Hidden damage: at the latest 7 days after delivery (excluding Sundays and public holidays)
• Delay: at the latest 21 days after the goods were made available
• Limitation period: 1 year, but 3 years in the case of intent or equivalent gross negligence

8. Subcontractors and liability

May the carrier use subcontractors? The contracting carrier is as a rule liable for its subcontractors' acts as for its own.

The carrier's and sender's duties

The carrier's duties

• To collect the goods at the agreed time and place
• To transport the goods carefully
• To deliver the goods at the agreed time, place and to the agreed recipient
• To keep a consignment note for CMR transports

The sender's duties

• To deliver the goods correctly packaged and marked
• To give correct information about the nature, weight and hazard class
• To pay the freight price as agreed
• To provide the necessary documents (for example customs documents)

Dangerous goods (ADR)

The ADR rules set requirements for classification, packaging, marking, documentation and driver training. The transport of dangerous goods requires a correct ADR transport document. A transport contract for dangerous goods should expressly state the ADR obligations and the allocation of responsibility for compliance.

Temperature-controlled transport

The transport of food and medicine requires temperature monitoring. The agreement should state:

• The required temperature range
• Documentation requirements (a temperature log)
• The consequences of a temperature deviation
• Who bears the loss on temperature damage

Frequently asked questions about transport contracts

Is a consignment note the same as a transport contract?

No. The consignment note documents the specific consignment and accompanies the goods. A transport contract is the framework agreement that governs the ongoing transport relationship.

What happens if the goods are damaged during transport?

The carrier is as a rule liable for damage, unless it is due to the sender's fault, the goods' own defects or circumstances the carrier could not avoid. Complain immediately on receipt, as a late complaint can weaken or forfeit the claim.

Can I claim compensation for lost profit on delay?

Under CMR, compensation for delay is limited to the freight amount. Indirect loss such as lost profit is as a rule not covered, unless extended terms have been agreed, or there is intent or gross negligence.

Is an oral freight agreement valid?

Yes, but it is hard to prove. A written consignment note or transport contract gives far better documentation.

Should I take out cargo insurance?

It is recommended for goods of high commercial value. The carrier's CMR liability covers at most 8.33 SDR per kg, which for electronics, medicine and other valuable goods is often insufficient.

Two typical scenarios

A framework contract for regular transport: A manufacturer with weekly pallet consignments to distribution centres enters into a framework transport contract with a fixed rate sheet, pick-up routes and liability and insurance terms. Consignment notes are used for the specific consignments.

A single consignment of special goods: A construction firm sends a heavy machine element and enters into a specific transport contract for the consignment with precise information about the nature, weight, delivery requirements and insurance of the goods.

Conclusion

A written transport contract protects both the sender and the carrier. It sets out a clear allocation of liability, frames the compensation claims and ensures that the logistics relationship is well thought through. Use a well-crafted template adapted to your mode of transport and your goods, and seek advice for international transports and dangerous goods.

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The content of this article is for guidance only and does not constitute legal advice. Contact a transport lawyer for advice on your specific situation, especially for international transports and dangerous goods.