8.33 SDR - What Is It? How Does It Affect Transport Insurance?

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8.33 SDR – What Is It? And How Does It Affect the Carrier’s Compensation?

8.33 SDR is a global, non-cash settlement unit listed on currency markets. It was created by the IMF to be used in international road transport. So what is the purpose of this mysterious value and how does it relate to insurance?

Carrier’s Civil Liability

To understand the significance of the 8.33 SDR value, we must start with the issue of the carrier’s civil liability. It is very precisely defined by the CMR Convention (Convention on the Contract for the International Carriage of Goods by Road).

Article 23 of this document informs us about calculating compensation for total or partial loss of goods. In point 3, we can read:

“Compensation, however, may not exceed 8.33 units of account per kilogram of missing gross weight.”

8.33 SDR – how is it applied in practice?

The above point introduces the concept of “units of account per kilogram of missing gross weight.” And this is exactly the precise definition of what lies beneath the English term Special Drawing Rights (SDR).

But how is the provision of 8.33 SDR applied in practice?

If the value of 1 kg of cargo exceeds the amount equivalent to 8.33 SDR. Then the transport company does not have to pay compensation equal to the full value of the stolen cargo. The average exchange rate of SDR in the NBP table in the early months of 2023 was 5.85 PLN.

In practice, if during international road transport there is a theft of cargo with an invoiced value of 300,000 EUR and a weight, for example, of 500 kg including packaging, we can calculate that the claim cannot exceed 24,365.25 PLN. (500 kg x 8.33 SDR x 5.85 PLN = 24,365.25 PLN) even if the stolen cargo was worth much more.

As follows from the above, the limit of the carrier’s liability for the entrusted cargo established in Article 23.3 of the CMR Convention is very favorable for transport companies. This is most often the case when the cargo is very light and expensive, e.g., branded sports shoes, electronics.

The carrier is not entitled to use Article 23.3 of the Convention if the damage to the cargo was deliberate or due to gross negligence.

An exception to Article 23.3 is also Article 24 of the CMR Convention.

According to Article 24, the sender may declare in the consignment note, for an agreed additional fee, the value of the goods. The limit is the declared value of the shipment or the value of the goods at the place and time they were accepted for transport.

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