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August 10, 1984


The opinion of the court was delivered by: DUFFY


Plaintiffs Parnass International Trade and Oil Corporation ("Parnass") and their marketing arm Sakson Ltd. ("Sakson") brought this action for breach of contract against the ocean carrier Sea-Land Service, Inc. ("Sea-Land"). Plaintiffs assert that Sea-Land substantially deviated from the contract within the meaning of the Carriage of Goods by Sea Act ("COGSA") 46 U.S.C. § 1304(4), rendering the carrier liable for damages allegedly incurred due to delay in the delivery of plaintiffs' goods. I held a two-day bench trial in this case on June 18, 1984. The following shall constitute my findings of fact and conclusions of law.


 Plaintiff Parnass operates in the Greek market as a seller of raw materials. For the past seven years, it has been involved in trading polyethylene.Parnass would arrange for the purchase of polyethylene on the international market and then resell the product to customers in the Greek market. As part of its trading activities in 1980, Parnass orally contracted to sell to certain of its Greek customers a quantity of polyethylene. Accordingly, it purchased 180,226 kilograms of bagged polyethylene from Cities Services Export, Inc. ("Cities Service").

 For several years previous to this occasion, Parnass had been using defendant Sea-Land as its ocean carrier for shipment of plaintiffs' raw materials' purchases. Parnass would contact defendant's exclusive agent in Greece, George Callitisis Successors S.A. ("Callitisis"), and arrange for the shipment through Callitisis' salesman Nicholas Theoharis. On this occasion, Parnass arranged for Cities Service to deliver nine containers loaded with polyethylene to Sea-Land at Houston on June 16, 1980. Six of the nine containers sailed from Houston on June 17, 1980, onboard the Sea-Land vessel S.S. Sœ venture pursuant to bill of ladning 961-536305.The remaining three containers sailed from Houston on June 23, 1980, on board the S.S. Sœ Producer pursuant to bill of lading 961-536359. These bills of lading were issued on Sea-Land's short form which incorporated the long form by reference and which provided that the port of loading was Houston and the port of discharge was Pireaus, Greece.

 The two ships did not carry the cargo directly from Houston to Pireaus, but rather, carried the cargo in accordance with Sea-Land's relay system. Sea-Land, as apparently with several large container ocean carriers, uses a relay system in which the first vessel is the line-haul vessel or the mother ship. This line-haul vessel carries the cargo transocean to a major relay point. At the relay point the cargo of the line-haul vessel is discharged to other smaller vessels, commonly labeled feeder vessels. These feeder vessels then carry the cargo to the discharge destination or to a second relay port and another feeder vessel.

 In the instant case, plaintiffs' cargo was carried by the line-haul vessels Venture and Producer, from Houston to the first relay point, Rotterdam, Netherlands. The Venture arrived in Rotterdam on July 2, 1980, and the Producer arrived on July 6, 1980. The cargo was thereafter discharged from the line-haul vessels and loaded onto a feeder vessel the S.S. Sœ Pioneer which left Rotterdam on July 11, 1980, and arrived in Algeciras, Spain on July 15, 1980. The cargo was again off-loaded in Algeciras, and loaded aboard the feeder vessel the Panarea. This vessel did not finally take plaintiffs' goods to Greece until July 30, 1980, arriving in Pireaus on August 4, 1980. Much of the delay apparently resulted from port congestion in Pireaus due to a strike.

 Plaintiff claims that it expected to receive its cargo on July 16, 1980, thirty days after delivery of the cargo to Sea-Land at Houston. It based its expectations, in part on Sea-Land's schedule which indicated an approximately thirty-day shipping time from Houston to Pireaus, on estimates plaintiff asserts were given by Sea-Land's Pireaus agent, and on previous experience in which shipments had taken less than thirty days. Plaintiff, in fact, contends that defendant's Greek agent guaranteed delivery within thirty days.

 According to plaintiff as a result of Sea-Land's failure to deliver the cargo within thirty days, all twelve of plaintiff's buyers cancelled their polyethylene orders.Apparently August is the major vacation month in Greece.Plaintiff asserts that it was thus unable to negotiate a sale of the polyethylene until September 1980, at which time the price of polyethylene had dropped approximately 20 percent. In addition, plaintiff contends that as a result of its failure to fulfill its contracts to supply polyethylene in July, it lost credibility in the market and was forced to withdraw completely. Plaintiff claims damages for the drop in polyethylene prices between August 16 and September 4, 1980, and seeks, in addition, a lump-sum payment for its loss of the entire polyethylene market.

 I reject plaintiff's claims for two reasons: first, I find that defendant did not deviate from the contract of carriage; and even if Sea-Land did deviate, the deviation was reasonable.


 COGSA provides that if a "deviation is for the purpose of loading or unloading cargo or passengers it shall, prima facie, be regarded as unreasonable." 46 U.S.C. § 1304(4). As part of its relay system, defendant twice off-loaded plaintiff's cargo and changed ships at ports unspecified in the bills of lading. In total, the cargo remained at these two other ports for twenty-five to twenty-eight days. If plaintiffs' establish that defendant's action constituted an unreasonable deviation, the defendant would be liable for all damages plaintiffs suffered. "The carrier becomes, in relation to the shipper, an insurer of the shipper's goods." Calmaquip Engineering West Hemisphere Corp. v. West Coast Carriers Ltd., 650 F.2d 633, 638 (5th Cir. 1981). I find, however, that Sea-land's relay system does not constitute a deviation from the contract of carriage for three reasons.

 First, I note that the long form bills of lading specifically provided for the possibility of carriage on several vessels. *fn1" Although the short form bills of lading were used by Sea-Land for plaintiff's cargo, the short forms expressly incorporated the terms and conditions of the long forms. Plaintiffs assert that the short form cannot incorporate terms for the long form which differ materially from COGSA and which are not clearly stated on the face of the short form bill of lading.Although the carrier may not use such a device to impermissibly limit its liability, see Encyclopaedia Britannica v. S.S. Hong Kong Producer, 422 F.2d. 7, 14 (2d Cir. 1969), cert. denied, 397 U.S. 964, 90 S. Ct. 998, 25 L. Ed. 2d 255 (1970), Sea-Land certainly could reasonably expect that the shipper's awareness of a long form bill of lading also gave it at least constructive knowledge of the existence of defendant's relay system therein described. The transfer of plaintiff's goods from one ship to another, moreover, did not increase the risk of damage because the polyethylene was non-perishable, well packaged, and the goods not inherently susceptible to damage.

 Second, I note that plaintiff had dealt with Sea-Land on previous occasions in which Sea-Land had utilized its relay system. Sea-Land has been relaying cargo for at least the past nineteen years. Defendants' Greek agents credibly stated that Parnass was made aware of Sea-Land's relay system. Sea-Land produced substantial literature and advertising concerning its relay system. Given plaintiff's prior contractual undertakings with defendant in which the relay system was used as well as the widespread dissemination of information ...

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