The lucrative yet inherently complex world of perishable goods export demands attention to legal and regulatory frameworks.
INCORPORATING COLD CHAIN
BUSINESS ANALYSIS
Legal and regulatory imperatives in perishable goods export By Eamonn Ryan
The lucrative yet inherently complex world of perishable goods export demands attention to legal and regulatory frameworks.
At a recent Johannesburg Chamber of Commerce and Industry( JCCI) webinar, Malcolm Hartwell, a shipping lawyer and head of transport at South African law firm Norton Rose Fulbright( NRF), provided critical insights into managing the significant risks involved in this high-stakes trade.
Hartwell, drawing on over 30 years of experience in shipping law, underscored that while the perishables market offers substantial rewards, it is fraught with considerably higher risks than, for instance, transporting bulk commodities or manufactured goods. With the vast majority of perishables now transported in increasingly sophisticated containers, and with welcome developments like Transnet ' s re-establishment of cold storage in Durban port, the focus shifts to the intricate web of contracts and regulations governing their journey.
For any international transaction, especially with perishable products, Hartwell emphasised the existence of three interconnected contracts:
• The contract of sale between seller and buyer dictates the terms of the trade
• The contract of carriage governs the physical transportation of the goods
• The contract of insurance provides financial protection against loss or damage
" Critically from a risk management point of view – you ' ve got to understand sales contracts properly," Hartwell asserted. A key element within the sales contract is the passing of risk. For a seller, the simplest scenario is‘ Ex Works’, where the buyer assumes all risk from the seller ' s warehouse. However, buyers typically prefer the seller to manage the entire process to the final destination. This is where Incoterms( International Commercial Terms), developed by the International Chamber of Commerce( ICC), become indispensable.
INCOTERMS: DEFINING RISK AND RESPONSIBILITY IN MULTIMODAL TRANSPORT
Incoterms clarify where risk passes from seller to buyer, directly influencing who arranges and pays for carriage
Malcolm Hartwell, shipping lawyer and head of transport at South African law firm Norton Rose Fulbright( NRF).
and insurance. Hartwell stressed that for perishable products, which almost inevitably involve multimodal transport( land, sea, then land again), using multimodal Incoterms is crucial. Terms like FOB( Free On Board), designed solely for sea carriage, are simply unsuitable for containerised, multimodal trade.
Multimodal Incoterms range from Ex Works to‘ DDP’( Delivered Duty Paid), where the seller bears all risk and cost until the product is delivered, duty paid, to the buyer ' s warehouse. As one moves along this spectrum, more risk is borne by the seller. Hartwell highlighted FCA( Free Carrier) as a common term, where the seller manages South African landside delivery and export formalities. CIP( Carriage and Insurance Paid To) extends the seller ' s responsibility to contracting for carriage and insurance to the first port in the destination country, with risk generally passing to the buyer once loaded on the ship. DDP, at the other extreme, means the seller manages everything up to the product ' s arrival in the buyer ' s warehouse. It is critical that the chosen Incoterm is appropriate for the trade and that the sales contract is explicitly clear, as Incoterms do not cover aspects like price, payment method or passing of ownership.
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March / April 2026 COLD LINK AFRICA
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