Breeze urges freight forwarders to review insurance after IATA DAWB changes

Freight forwarders should review their contracts and insurance cover following the introduction of the International Air Transport Association's (IATA) revised Direct Air Waybill (DAWB) framework, according to digital cargo insurance provider Breeze. The company says the new framework could change how legal responsibilities are shared between airlines, shippers and freight forwarders, creating uncertainty over who is responsible and whether current insurance cover is enough.

The revised IATA Direct Air Waybill framework came into effect on 1 July. It is designed to rebalance contractual responsibilities between airlines and freight forwarders. The changes have led to discussions across the air cargo industry about their legal, operational and insurance impact, especially if different airlines implement the framework in different ways.

"Without a doubt, this represents a significant reallocation of risk," said Matthew Phillips, Chief Commercial Officer, Breeze.

"Liability is generally expected to follow control, and the revised framework raises legitimate questions where a freight forwarder could potentially become responsible for matters traditionally associated with the shipper or carrier.

"The uncertainty is increased if implementation differs between airlines, meaning forwarders may need to understand the contractual position on a carrier-by-carrier basis."

Phillips said freight forwarder liability insurance has traditionally been designed to cover risks that forwarders can control, such as their own errors, omissions and negligence when arranging transport, rather than responsibilities that belong to shippers.

He said that if freight forwarders take on responsibilities that were previously handled by shippers under the new framework, insurers may review how these risks are assessed. This could result in changes to insurance terms, pricing or the way policies are written as the industry gains a better understanding of the new arrangements.

Breeze believes freight forwarders do not need to wait for the insurance market to adjust. Instead, they can reduce uncertainty by making sure the cargo is properly insured.

"The most practical step forwarders can take today is to confirm whether the shipper has comprehensive all risks cargo insurance and, where appropriate, offer cover on a shipment-by-shipment basis," said Phillips.

"That provides immediate protection for the cargo owner while helping reduce uninsured exposure across the supply chain as the industry adapts to the revised framework."

Breeze said freight forwarders are expected to work closely with airlines, insurers and customers as the industry adapts, so they understand how the revised framework will be applied in practice.