In shipping logistics, precision at every stage is vital. A single miscommunication, like a temperature setting, can be detrimental to both the cargo and the companies involved in its transportation. A routine shipment can quickly escalate into a costly legal dispute. This is what occurred in the six year case Manassen Foods v Seaway Logistics, where a misunderstanding over refrigeration settings led to the spoilage of an entire cargo of salad dressing and complex legal battle involving freight forwarders, cargo owners, insurers and an ocean carrier. The issue represented more than just a single operational error, it brought to light what can unfold when there’s a lack of clarity in contractual relationships and coverage responsibilities.
This case highlights a critical lesson for logistics providers and their partners – when contracts are vague and responsibilities aren’t clearly defined; confusion becomes a systemic risk that can result in detrimental costs. It’s therefore crucial to establish defined contractual agreements and ensure adequate insurance to prevent disputes that arise from undisclosed principal, protect cargo, and preserve partner relationships.
Manassen Foods is an Australian importer that bought salad dressing from a US supplier on an Ex Works (EXW) basis. They hired Seaway Logistics, a freight forwarder, to manage shipping from California to Australia under a ‘Services Agreement’ in which Seaway agreed to indemnify Manassen and assumed liability for the negligence of its subcontractors. Seaway then subcontracted US freight forwarder, AWA (Intelligent SCM LLC), who then engaged ANL Singapore for ocean transport.
The crux of the problem was that AWA requested reefers be set at +10 degrees Celsius, but ANL confirmed and shipped at -10 degrees Celsius. The large volume of salad dressing therefore spoilt during transit.
Following the spoilage of their entire cargo Manassen Foods sued Seaway and ANL in 2018, but later dropped ANL. Seaway settled with Manassen for approximately AUD $433,000 (including interest and costs). Seaway then proceeded to sue AWA, claiming that AWA was negligent as its agent and subcontractor.
AWA denied being Seaway’s agent or subcontractor and instead claimed that Seaway was contributorily negligent for not informing AWA of the correct temperature.
The verdict? The court ruled that AWA was acting as an agent for Manassen (undisclosed principal). Therefore, AWA had a contractual relationship with Seaway, with an implied duty of due care and skill. AWA failed to correct ANL’s temperature of error, even when prompted. The result was that AWA was found 60% liable for the first and third shipments, amounting to 80% of the total loss.
The case highlights some key legal principles and the importance of adhering to them:
1. Double-check critical instructions
Freight forwarders should ensure written procedures with all subcontractors as the issue in this case was the was a temperature error: +10 degrees Celsius was mistakenly interpreted as -10 degrees Celsius. This highlights the need for a robust verification process between freightforwarders and shipping lines. As technology rapidly develops, AI tools can be increasingly utilised to, for example, flag anomalies in temperature settings or detect inconsistencies in booking instructions.
Key takeaway = a simple keying error led to a total loss of cargo
2. Clarity in contracts between partners
Seaway and AWA did not have a clearly defined, signed agreement outlining roles and responsibilities. This ambiguity contributed significantly to the legal dispute and complicated the determination ofliability. Freight forwarders should ensure written contracts with all subcontractors or agents, especially when delegating critical tasks. Contracts should clearly define:
3. Understand liability chains
Seaway had a specific agreement with Manassen that increased its liability, likely beyondwhat AWA anticipated. This case shows how liability can cascade through thesupply chain, especially when upstream contracts impose enhanced levels of liability.
Freight forwarders should:
4. Beyond the house bill: liability isn’t always where you expect
AWA issued the house bill, but its liability stemmed not from being a carrier, but from failing to meet its service obligations to Seaway. This challenges the assumption that liability follows the bill of lading. Freight forwarders must therefore ensure they meet professional standards of care, even when they’re not acting as carriers.
5. Cross-border communications risks
The shipment was booked in the US, where Fahrenheit is standard, but the temperature was communicated in Celsius. +10°F ≈ -12°C, which could explain the confusion.
This underscores the need for:
6. Technology and tracking
It’s unclear if temperature trackers were used in the containers. However, if they had been, the incorrect setting might have been caught before departure.
Investing in real-time monitoring tech can:
While the case involved food and freight companies, the financial burden likely fell on the insurers for those companies: Manassen’s cargo insurer, Seaway and AWA’s freight forwarding liability insurers, and ANL’s P&I Club. This reinforces the importance of:
The Manassen Foods case is a cautionary lesson for anyone involved in freight logistics. It shows how a very simple miscommunication, compounded by unclear contracts and misunderstood responsibilities, can lead to a significant financial loss and complex legal case. In a global supply chain, clarity isn’t optional; it’s absolutely essential. Freight forwarders, agents and shippers must ensure precise instructions, clearly defined agreements and comprehensive insurance coverage to safeguard against preventable errors. Investing in a tailored insurance solution is the best way of protecting your company from repeating these mistakes.
[1] Kennedys, ManassenFoods v Seaway Logistics: A Salad Dressing Debacle Decided as a Matter ofUndisclosed Principal (Kennedys Law,2025) https://kennedyslaw.com/en/thought-leadership/case-review/2025/manassen-foods-v-seaway-logistics-a-salad-dressing-debacle-decided-as-a-matter-of-undisclosed-principal/ (accessed15 August 2025).
[1] Kennedys, ManassenFoods v Seaway Logistics: A Salad Dressing Debacle Decided as a Matter ofUndisclosed Principal (Kennedys Law,2025) https://kennedyslaw.com/en/thought-leadership/case-review/2025/manassen-foods-v-seaway-logistics-a-salad-dressing-debacle-decided-as-a-matter-of-undisclosed-principal/ (accessed15 August 2025).
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