Federal Maritime Commission

In the USA, the Federal Maritime Commission is very strict in its control of shipping companies and has determined that Non-Vessel Operating Carriers (NVOCs) are considered as common carriers under US law hence one encounters the initials with the additional “C” (NVOCCs). The important distinction between common and private carriers is in respect of their liability. Common carriers are strictly liable for any loss or damage which occurs to the goods in their care. In other words, they are liable irrespective of their lack of negligence. A private carrier, on the other hand, is a bailee of the goods and as such is only liable for damage through his negligence.  Where loss is caused by delay, both the common and the private carrier will only be liable if the delay was caused by their negligence. Notwithstanding the fact that a common carrier can always be sued for refusal to carry, he is not bound to undertake the common carrier’s strict liability. He may make a special contract with the other party which either excludes altogether or restricts his strict liability. It may in fact be difficult to ascertain in ‘black and white’ terms whether a carrier is a common or private carrier. The cases contain many contradictory statements. In reality, this is not often a problem as most carriers will contract under express contracts which deal with the carrier’s obligations. There is little recent case law on the distinction, although the issue does arise from time to time.