As of May 1, the new edition of China's Maritime Code has come into effect. The impact of these changes is already being felt among carriers and freight forwarders, who are now reviewing their contracts, operational procedures, and assessing potential liability risks.

Main Changes in China’s Maritime Legislation

This is the first comprehensive update to the country’s maritime laws in over 30 years. The new code introduces mandatory legal provisions for international maritime cargo contracts whenever a Chinese port is involved in loading or unloading, regardless of whether the contract specifies the application of foreign law.

Among the most significant changes is the narrowing of the traditional fire exemption clause. Now, carriers can only claim exemption from liability in the event of a fire occurring on the vessel itself, excluding incidents at terminals, container yards, or inland transport facilities. This adjustment is linked to the growing export of Chinese electric vehicles and lithium batteries, which has heightened concerns about fire risks.

New Requirements for Shipping Documentation

There is now a requirement to indicate in the bill of lading if cargo is stowed on deck. Otherwise, the carrier may lose important legal protections. This change may require carriers to significantly adjust their documentation processes, as distinguishing between containers stowed below deck and on deck is often challenging due to the specifics of data exchange between port agents and stevedores.

Impact on Freight Forwarders and NVOCCs

The changes also affect freight forwarders, especially those issuing their own FIATA multimodal bills of lading. Depending on their role, forwarders may be regarded as shippers or multimodal transport operators, increasing their liability for unclaimed cargo, retention, and claims. It is recommended to clearly define contractual roles, review standard terms, and maintain evidence that can establish the location of loss or damage to cargo during multimodal transport.

Timeframes for Handling Unclaimed Cargo

The updated code extends the period before unclaimed cargo can be auctioned. If cargo remains unclaimed for 60 days after the vessel’s arrival, the carrier may apply to the court for permission to sell it. This period is significantly longer than commercial timeframes in other countries and may be viewed positively by many exporters and shippers accustomed to a three-month standard.

Conclusion

Overall, the revised legislation offers several advantages for cargo owners and affects all market participants, including common carriers and NVOCCs issuing multimodal bills of lading when acting as shippers.