The current conflict in parts of the Middle East continue to present a complex and uncertain backdrop for maritime and port operations, with the potential for rapid change.

This article is intended to assist Members in understanding the key risk considerations and risk mitigation steps to take in the current situation.

Shipping lines, ports and freight forwarders find themselves navigating a range of operational, contractual, safety, and liability challenges arising from broader geopolitical circumstances beyond their control.

The guidance below covers relatively dry commercial and procedural issues but the human cost to seafarers, shore based personnel and the wider civilian population must be considered.

Contractual implications

The ongoing conflict will impact contracts, as shipping lines are having to make difficult decisions in an ever-changing situation. Ships are being diverted/halted in the Arabian Gulf, the main conflict zone or alternative ports that were not the intended destination. In all cases they will be relying in the clauses contained withing international conventions or their own trading conditions.

BIFA Members trading under both the 2021 or 2025 edition of the BIFA Standard Trading Conditions (STC), where incorporated in the forwarding contracts with clients, have levers with which to protect themselves whether acting as Agent or Principal.

All guidance is given on the basis of the 2025 edition, which is the current edition. Clauses 4, 5 and 11 are often overlooked but in the current situation are key.
They state that Members (dependent on circumstance) can act as either Agent or Principal. However, in general terms the Member has the liberty to contract on “any terms whatsoever” all or part of the service. Effectively this is a contractual chain, between the Member and their Customer: and the Customer permits the Member to then contract on their behalf with the carrier on their terms or the relevant international convention.

The slow return to vessels using the Red Sea/Suez Canal seems to have halted with vessels diverting back to using the Cape of Good Hope. Given the mixed destinations for cargo on board vessels, some delay is to be anticipated as alternative berths are found to offload cargo destined for ports either closed/under threat.

Key points for consideration

• Review and strengthen procedures to incorporate STCs in all forwarding contracts
• Familiarise yourselves with key clauses (covered below)
• Avoid offering guarantees or inflexible service delivery commitments during rapidly evolving events
• Do not assume recoverability of losses arising from war related events, such as delays to cargo movements which could lead to shortages and also consequential loss
• Prepare for increased security requirements under the ISPS Code, including potential access restrictions, operational disruption, and compliance obligations
• Liaise with shipping lines to establish the service impacts, such as surcharges, delays etc
• Discuss with insurers the impact of the situation on both Marine Insurance and Freight Forwarder Liability policies
• Maintain clear records of all conversation confirmed by e-mail as a record of mitigation activities

We are aware of cases where customers have cancelled consignments that were already booked. In some instances, carriers and overseas agents have charged the Member cancellation fees, but the customer has declined to cover these costs.

While the STCs provide mechanisms to recover these charges, we recommend including a disclaimer on all communications to highlight potential liability for losses, delays, or cancellation fees in the current situation

BIFA Standard Trading Conditions

Below are the clauses to refer to in line with the 2025 BIFA STC:

• Clause 24 (B) – Force Majeure clause: The Company shall be relieved of liability for any loss or damage if, and to the extent that, such loss or damage is caused by any cause or event which the Company, by the exercise of reasonable diligence, is unable to avoid and the consequences of which it is unable to prevent
• Clause 25 – Delivery not guaranteed: Unless it is expressly agreed in writing that the provisions of this clause 25 shall not apply, the Company has no liability for a failure to adhere to agreed departure or arrival dates of Goods, regardless of the cause.
• Clauses 20 (A) & (B) – Indemnity clauses

This is a developing issue; please stay tuned for further updates. If you require BIFA’s advice, please get in touch.

Please note that this is general industry guidance based upon issues Members have brought to BIFA’s attention. It does not constitute legal advice. Where a Member has a specific legal issue, they must seek the advice of a suitably qualified solicitor.

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