Under COGSA, what is the limitation on ocean carrier liability for cargo loss or damage?

The correct choice highlights the limitation on ocean carrier liability for cargo loss or damage under the Carriage of Goods by Sea Act (COGSA). Specifically, COGSA establishes that the carrier's liability is limited to a certain amount based on the weight of the cargo, quantified as Special Drawing Rights (SDR) per kilogram or per package.

According to COGSA, the limitation is indeed set at SDR 2 per kilogram of the cargo's weight, or a maximum of SDR 666.67 per package, whichever is the higher amount. This framework is designed to provide a balance between the interests of shippers and carriers, ensuring that carriers have some level of protection against exorbitant claims, while also allowing shippers to have a reasonable expectation of compensation in the event of loss or damage.

Understanding this limit is crucial for exporters as it influences decisions regarding insurance and risk management for their cargo shipments. This knowledge helps in effectively planning for potential liabilities and understanding their rights under international shipping regulations.