What counts as a "package" under the Hague-Visby Rules?

Under the Hague-Visby Rules the carrier's limit is the higher of 666.67 SDR per package or unit and 2 SDR per kilogram. For heavy bulk goods the kilo figure usually wins. For light, valuable goods packed in many cartons, the number of packages decides everything, and that number depends on how the bill of lading is worded.

The rule

Article IV rule 5(a) limits liability to "666.67 units of account per package or unit or 2 units of account per kilogramme of gross weight of the goods lost or damaged, whichever is the higher". Rule 5(c) then deals with containers:

"Where a container, pallet or similar article of transport is used to consolidate goods, the number of packages or units enumerated in the bill of lading as packed in such article of transport shall be deemed the number of packages or units for the purpose of this paragraph as far as these packages or units are concerned. Except as aforesaid such article of transport shall be considered the package or unit."

In plain language: if the bill of lading lists what is inside the container, each listed item is a package. If it does not, the whole container is one package.

Why it matters: a quick illustration

Take a container with 400 cartons of electronics, 4,000 kg gross, worth US$200,000, totally lost.

• Bill of lading says "1 x 40' container said to contain 400 cartons": 400 packages × 666.67 = 266,668 SDR, which exceeds the kilo figure (8,000 SDR). The limit is above the cargo value, so you recover your proven loss.
• Bill of lading says only "1 x 40' container, electronics": 1 package × 666.67 = 666.67 SDR, against 2 × 4,000 = 8,000 SDR. The kilo figure is higher, so the limit is 8,000 SDR, roughly a twentieth of the cargo value.

Try both in the calculator: 400 packages versus 1 package. A fuller version is in our worked example.

The River Gurara (Court of Appeal, 1997)

Nigerian National Shipping Line Ltd v Owners of Cargo Lately Laden on Board "River Gurara" [1997] EWCA Civ 2105; [1998] 1 Lloyd's Rep 225. Cargo shipped in containers was lost and the cargo owners claimed against the shipowners. The contracts were governed by the Hague Rules (not Hague-Visby), which say nothing about containers. The Court of Appeal held that:

• The "package" for limitation was the individual item packed inside the container, not the container itself.
• A bill of lading clause deeming a shipper-packed container to be one package was void under Article III rule 8, because it lessened the carrier's liability.
• Words such as "said to contain" meant the bill of lading was not conclusive about the number of packages; the cargo owners could prove the actual number with other evidence, and bore the burden of doing so.

The case is still widely cited for the principle that the container is not automatically the package. Under Hague-Visby, however, the express wording of rule 5(c) governs, and the key question becomes what the bill of lading enumerates.

The Maersk Tangier (Court of Appeal, 2018)

AP Moller-Maersk A/S v Kyokuyo Ltd [2018] EWCA Civ 778. Cargoes of frozen tuna carried in containers were damaged. The shipments moved on sea waybills, not bills of lading. According to the BAILII judgment summary and the CMI database:

• The Hague-Visby Rules applied compulsorily, because the contract of carriage provided for a bill of lading to be issued on demand, even though none was actually issued.
• Where the waybill enumerated the tuna loins individually (e.g. a count of pieces), each loin was a separate package or unit, so the package limit far exceeded the kilo limit.
• For a container where the waybill did not enumerate the contents, the container was the single package or unit.
• Enumeration did not require the document to say that the items were loose or unpackaged; listing the number of items was enough.

We have relied on the BAILII report and the CMI case summary for the outcome of this appeal; we could not machine-verify every paragraph of the judgment text. to confirm against the full judgment before relying on details

Other jurisdictions

Courts in the United States, Canada, Australia and elsewhere have their own case law on the package question, particularly under US COGSA, where the limit is US$500 per package or "customary freight unit". Results vary and we have not summarised them here. to confirm per jurisdiction

What shippers should do

1. Make sure the bill of lading (or waybill) states the number of packages inside each container, e.g. "400 cartons", not just "1 container" or "1 lot".
2. Use meaningful units. "20 pallets" gives 20 packages; "20 pallets containing 400 cartons" may give 400. The more precise enumeration is usually better for you, but courts read the actual wording.
3. Check the draft bill of lading before it is issued; correcting it later is hard.
4. Do not rely on the package limit to protect high-value cargo. Even with good enumeration, the carrier may have a defence (e.g. nautical fault or fire). Insure the cargo or declare its value.
5. Remember the limit can be lost only in narrow cases: Art. IV r.5(e) removes it if the damage resulted from an act or omission of the carrier "done with intent to cause damage, or recklessly and with knowledge that damage would probably result". That is very hard to prove.