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Shipping is among the most highly regulated industries. Shipping regulations are formulated at international levels to enhance international safety standards. These regulations ensure that none of the crucial stakeholders cuts corners at the risk of others. For instance, before the Acts of Carriage of Goods by Sea was introduced, some shipping companies included extra exemption clauses on the carriage of goods contracts signed between them and freight forwarders and carriers. In this case, cargo owners could claim compensation any time a load is damaged due to the carelessness and mistakes of the shippers.
When the Act of Carriage of Goods by Sea was introduced in 1924, shippers’ and cargo owners’ rights and responsibilities were clearly stated, thereby putting shippers in check. The lack of shipping regulations would have translated to conflicting national rules leading to administrative confusion and commercial distortion, ultimately compromising world trade efficiency. That is why uniform laws are crucial in various matters such as crew competency standards, shipping navigational rules, ship design, construction guidelines, just to mention a few.