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The Single Rule That Made Global Air Cargo Trade Possible
Description
In this 100th episode of Global Trade with Fexingo, Lucas and Luna explore the one rule that made global air cargo trade possible: the 1929 Warsaw Convention and its 1999 Montreal Protocol update. They explain how this framework created a uniform liability regime for international air transport, setting a cap of roughly $23 per kilogram for lost or damaged cargo. The hosts trace how this single legal standard gave insurers, banks, and logistics firms the predictability needed to finance and insure high-value, time-sensitive shipments across borders. They discuss the convention's origins in the early days of commercial aviation, the 1966 increase to $75,000 per passenger, and the shift to Special Drawing Rights under the Montreal Protocol. Lucas and Luna also examine how the rules affect e-commerce today, where a package worth $50 gets the same liability treatment as a $50,000 shipment. The episode closes with a look at whether the framework is outdated for modern supply chains.