Air Cargo Insurance and Montreal Convention Recovery Brief for Malaysian and Singaporean Cargo Owners

USD 7,124 carrier cap. USD 100,000 of pharmaceutical air freight on the water. The 92.9 percent gap is your cargo policy's job, not the carrier's. Walk this brief before the carrier offer becomes the answer by default.

Montreal Convention caps air carrier liability at 26 SDR per kilogram of gross weight, effective 28 December 2024. On a 200 kg pharma consignment worth USD 100,000, that works out to a USD 7,124 carrier cap at the April 2026 SDR/USD rate of 1.37. The other USD 92,876 sits with the cargo owner unless cargo insurance closes the gap. Built for cargo owners shipping pharma, semiconductor, electronics, and high-value air freight from KLIA, Penang, and Changi.

What you get inside

A six-row recovery framework, an SDR-to-USD reference, a worked example, a claim worksheet, and a decision card.

• The Article 18 strict liability rule: the carrier is liable up to the cap without proof of fault, subject to the narrow Article 18(2) defences (inherent defect, defective packing, act of war, act of public authority).
• An SDR-to-USD reference at SDR/USD 1.37 (April 2026 IMF), with the prior 22 SDR/kg cap framed as historical reference.
• A worked example for a USD 100,000 pharma consignment, KLIA to Frankfurt, with the cap and gap arithmetic.
• A three-step claim worksheet: the loss, the incident type, the recovery picture.
• The Article 31 notice rules: 14 days for damage, 21 days for delay, with a 2-year time bar under Article 35.
• A decision card mapping three insurance positions to a next step.

How Montreal Convention compares to Hague-Visby

Air carriage under Montreal is strict liability up to a per-kilogram cap. Sea carriage under Hague-Visby is fault-based and uses a per-package or per-kilogram cap, whichever higher.

Who this is for

Built for cargo owners, traders, and claim handlers in Malaysia and Singapore shipping high-value, low-weight air freight (pharma, semiconductor, electronics, machined components) from KLIA, Penang, and Changi to EU, US, Middle East, and intra-ASEAN destinations. The brief assumes commercial maturity and a working familiarity with air waybills, ICC clauses, and the basic structure of cargo claims.

What this brief references

All recovery and coverage references are subject to policy terms and conditions and the convention applicable to the contract of carriage. The brief draws on Montreal Convention 1999 (Article 18 strict liability, Article 22(3) 26 SDR/kg cap effective 28 December 2024, Article 31 notice rules, Article 35 time bar), Institute Cargo Clauses (A), (B), and (C) 2009, Institute War Clauses (Cargo) CL385 dated 01.01.2009, Institute Strikes Clauses (Cargo) CL386 dated 01.01.2009, and the IMF SDR rate published daily.

Frequently asked questions

What is the Montreal Convention cargo liability cap?

The Montreal Convention 1999 caps carrier liability for cargo at 26 SDR per kilogram of gross weight, effective 28 December 2024 under the ICAO triennial review. The prior cap was 22 SDR per kilogram. The cap may be lifted only by a special declaration of value at the air waybill, paid at supplementary rate.

What is the difference between Montreal Convention and Hague-Visby?

Montreal applies to international air carriage between Convention states with strict liability for cargo up to 26 SDR per kilogram. Hague-Visby applies to international sea carriage with fault-based liability up to the higher of 666.67 SDR per package or 2 SDR per kilogram. Sea claims contest carrier fault under Article IV(2)(q); air claims do not.

What is the notice deadline for an air cargo claim?

Article 31 of the Montreal Convention requires written complaint within 14 days of receipt for damage and within 21 days for delay. Late notice forfeits the claim. The action must be brought within 2 years under Article 35.

How does the Montreal cap compare to a high-value air shipment?

A 200 kg pharmaceutical consignment worth USD 100,000 hits a carrier cap of about USD 7,124 at the April 2026 SDR/USD rate. The recovery gap to invoice is roughly 92.9 percent. Marine cargo insurance, with air transit cover, closes this gap, subject to policy terms and conditions.

Download the brief, walk the framework against your live claim or your next consignment, and notify your insurer or intermediary before the 14 day notice clock expires.