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ORIENT OVERSEAS CONTAINER LINE v. SEA-LAND SERVICE

November 28, 2000

ORIENT OVERSEAS CONTAINER LINE, (UK) LTD., PLAINTIFF,
V.
SEA-LAND SERVICE, INC., AND M/V SEALAND QUALITY, HER ENGINES, BOILERS, TACKLE, ETC. IN REM, DEFENDANTS.



The opinion of the court was delivered by: Haight, Senior District Judge.

MEMORANDUM OPINION AND ORDER

For decades American admiralty courts have struggled to define the deceptively simple noun "package" within the context of § 4(5) of the Carriage of Goods by Sea act, 46 U.S.C. App. § 1304(5) ("COGSA" or the "Act"), which limits an ocean carrier's liability for cargo damage or loss to "$500 per package . . ., or in case of goods not shipped in packages, per customary freight unit," unless the cargo skipper declares a higher value and pays a higher freight. "Freight" in this context refers not to the cargo, but the amount the carrier charges for the cargo's transportation.

This case, before the Court on stipulated facts and cross-motions for partial summary judgment, shows that the struggle to define "packages" continues.

I. BACKGROUND

The following account is derived from the Stipulation of Facts ("SF") entered into by the parties.

At the pertinent times plaintiff Orient Overseas Container Lines (UK) Ltd., ("OOCL") and defendant Sea-Land Service, Inc. ("Sea-Land") were parties to a Space Charter and Sailing Agreement (the "Agreement"). OOCL and Sea-Land were both ocean common carriers. The Agreement enabled OOCL to provide its services upon vessels owned or operated by Sea-Land, for carriage of cargoes between certain United States and North European ports. One of the vessels Sea-Land owned or operated was the M/V SEALAND QUALITY.

As its corporate name indicates, OOCL conducted its business by arranging for the ocean carriage of goods stowed in containers. "Containers are very large, oblong metal boxes, resembling trucks without wheels or cabs." Allied International American Eagle Trading Corp. v. S.S. Yang Ming, 672 F.2d 1055, 1058 (2d Cir. 1982).

In January 1994, pursuant to the Agreement, OOCL chartered space aboard the M/V SEALAND QUALITY for the carriage of 1,768 Ford automobile engines from Rotterdam to the port of New York. The engines were not covered by any wrapping and were not boxed or crated. They were stowed on racks designed to accommodate 8 engines each. The racks were then stowed in 17 containers, 13 racks in each container. Thus each container contained 104 engines (8 engines times 13 racks), thereby accommodating the shipment of 1,768 engines (104 engines times 17 containers).

The racks were the property of the shipper of the engines, Ford Werke A.G., which placed the engines on the racks. The racks were not integral parts of the OOCL containers in which the engines were stowed.

The entire shipment of 1,768 engines was covered by a single ocean bill of lading, number 00LW37502149, which OOCL issued with Sea-Land's consent to the shipper of the engines, Ford Werke A.G. OOCL and Sea-Land were both ocean carriers, and thus became jointly and severally responsible for performance of the contract of carriage created by the bill of lading.

The bill of lading recited that on January 17, 1994, the 1,768 engines were laden on board the M/V SEALAND QUALITY at the port of Rotterdam, to be discharged at the port of New York for ultimate delivery to the consignee, Ford Motor Company, at St. Paul, Minnesota. I will refer to the two Ford corporations involved collectively as "Ford."

As is customary in the trade, the bill of lading was comprised of a printed form with spaces in which the details of the shipment were typed. A printed clause incorporated by reference the limitations upon the carrier's liability found in § 4(5) of COGSA. Since the carriage was to a United States port, COGSA would in any event have applied ex proprio vigore. Another printed clause in the bill of lading extended its COGSA-derived defenses and limitations to the carriers' subcontractors, including stevedores and cargo handlers at the discharge port.

The face of the bill of lading contained a printed caption reading "PARTICULARS FURNISHED BY SHIPPER." Five columns were collected under that caption, each with a printed sub-caption, reading from left to right as follows:

"CNTR. NOS. W/SEAL NOS. MARKS AND NUMBERS"

"QUANTITY PACKAGES"

"DESCRIPTION OF PACKAGES AND GOODS"

"GROSS WEIGHT"

"MEASUREMENT"

Typed details were filled in under each of these five printed sub-captions, as follows:

Under the printed sub-caption "CNTR.NOS W/SEAL NOS. MARKS AND NUMBERS" appears the typed notation "N/M." Presumably this is an abbreviation for "No Marks."

Under the printed sub-caption "QUANTITY PACKAGES" appears the typed notation "1768 PCS." Presumably "PCS" is an abbreviation for "pieces."

Under the printed sub-caption "DESCRIPTION OF PACKAGES AND GOODS" appear the following typed notations:

"S.T.C.

AUTOMOBILE ...


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