Case review: Claims and risk avoidance caused by a door and window export logistics dispute

I. Case background
Exporting company: a Chinese door and window manufacturer (hereinafter referred to as Company
Importing customer: German builder (hereinafter referred to as Company B)
Product: Customized aluminum alloy doors and windows (total value $85,000)
Transportation method: FOB Shenzhen → Hamburg Port (Full container shipping)
Insurance: All Risks
Cause of dispute: After the goods arrived at the port, the customer found that 30% of the door and window glass was broken, refused to accept the goods and demanded full compensation.

II. Dispute handling process

1. Problem discovery and initial communication
   Customer complaint: Company B found that some glass was broken when receiving the goods, provided on-site photos and inspection reports, and asked Company A to bear the losses.

Company A’s response:

Checked the packing photos (goods were intact when loaded into the container)

Retrieved the ocean bill of lading (no abnormal annotations)

Contacted the freight forwarder and insurance company to initiate an investigation

2. Responsibility determination and dispute points
   Disputing party Claims Rebuttal basis
   Customer (Company B) Goods had quality problems when leaving the factory Provided factory quality inspection report to prove that they were intact before shipment
   Company A Damaged due to vibration or rough loading and unloading during transportation The container seal was intact, but there was no shockproof fixing measure inside
   Shipping company According to the “ocean bill of lading terms”, it does not bear the responsibility for damage to fragile goods The terms on the back of the bill of lading stated “glass products are exempted from liability”
   Insurance company Needs to prove that it is covered (external impact or accident) After investigation, it was determined that “the packaging does not meet industry standards” and partially refused to pay
3. Claim processing results
   Insurance company: only 50% compensation (because the packaging does not meet the standards, the “underpayment” clause applies)

Company A: bear the remaining 30% loss (about $12,000)

Customer (Company B): accept partial compensation, but reduce future orders

III. Risk root cause analysis

1. Direct cause
   Packaging defects: the glass is only wrapped with ordinary foam, and no special earthquake-resistant frame is used.

Unfavorable transportation terms: Under the FOB terms, Company A cannot control the sea transportation process.

Insurance terms omissions: no additional “breakage insurance” is insured, and the packaging does not meet the insurance requirements.

2. Deep management issues
   Inspection process missing: no third-party inspection report (such as SGS) is required as a delivery certificate.

Ambiguous contract terms: The transportation risk sharing and claim process are not clear.

Logistics supplier selection: The freight forwarder does not provide a professional fragile goods transportation plan.

IV. Risk avoidance strategy (improvement measures that enterprises can take)

1. Optimize the transportation link
   Upgrade the packaging solution:
   Use steel corner guard + air cushion film + wooden frame fixation (cost increases by 5%, but the damage rate drops to less than 1%)
   Use “container filling airbag” to prevent transportation shaking
   Adjust trade terms:
   CIF terms (control insurance and transportation options)
   Or DAP/DDP (take the initiative in terminal distribution)
2. Legal and contract management
   Improve sales contracts:
   Clear “cargo risk transfer node” (such as FOB after leaving the port, the risk belongs to the buyer)
   Agree on “third-party inspection” as the basis for quality disputes
   Bill of lading annotation clause: require the shipping company to annotate “cargo in the container intact” to avoid subsequent shirking
3. Insurance and claims skills
   Insurance portfolio optimization:
   Basic insurance (All Risks) + additional “Breakage Insurance” (Breakage Insurance) Risk)

Declare “professional packaging” to obtain full compensation

Claim material preparation:

Loading surveillance video, notarized inspection report, shipping company accident certificate

4. Supply chain collaboration
   Choose a professional logistics provider:

Cooperate with a freight forwarder with “experience in large-scale transportation of building materials”

Require an “anti-seismic plan” and write it into the contract

Pre-communication with customers:

Inform of transportation risks in advance and negotiate a sharing plan (such as customers purchasing insurance by themselves)

V. Case enlightenment
High-risk points for door and window exports: glass and hardware are fragile and must be specially protected.

FOB is not omnipotent: small and medium-sized export enterprises are advised to strive for CIF to control transportation quality.

Insurance cannot replace risk management: before insurance, it is necessary to ensure that the packaging meets the standards, otherwise the claim may be rejected.

The cost of dispute resolution is much higher than the cost of prevention: In this case, the loss of $12,000 can cover the cost of packaging upgrades for 5 years.

Recommended action list:
✅ Make a “transportation risk assessment form” for each export
✅ Establish “packaging standards for vulnerable parts” and train the logistics team
✅ Add “force majeure + liability limit” clauses to the contract
✅ Regularly review the service quality of freight forwarders and insurance companies

Through systematic improvements, companies can reduce the probability of similar disputes by more than 80%.