Importance of Service Agreement & Shipping Contract

Protects both clients and logistics providers

A Service Agreement and Shipping Contract are essential legal and operational documents in freight forwarding and international logistics. They protect both the logistics service provider and the client by defining responsibilities, risks, costs, and procedures.

1. Legal Protection

Defines the legal relationship between all parties and provides a basis for dispute resolution.

2. Clear Scope of Services

Specifies services such as air freight, sea freight, customs clearance, warehousing, and procurement.

3. Liability & Risk Allocation

Clarifies responsibility for cargo loss, damage, delays, and aligns liability with international conventions.

4. Payment Terms & Transparency

Outlines freight charges, payment timelines, currencies, and penalties for non-payment.

5. Claims & Dispute Resolution

Defines claim procedures, reporting timelines, and dispute resolution mechanisms.

6. Regulatory Compliance

Ensures compliance with customs laws, export/import regulations, and international shipping rules.

7. Cargo Insurance Clarity

Specifies whether cargo insurance is included, optional, or mandatory.

8. Operational Efficiency

Establishes standard procedures for booking, documentation, cargo release, and storage.

9. Fraud Prevention

Protects against fake payments, illegal cargo, and misrepresentation of goods.

10. Business Credibility

Enhances professionalism, trust, and long-term client relationships.

Conclusion

A Service Agreement and Shipping Contract is a critical risk management and legal protection tool that ensures smooth logistics operations, protects revenue, and safeguards cargo throughout the supply chain.