SDR Calculator
What is SDR (Special Drawing Rights)?
SDR (Special Drawing Rights) is an international reserve asset created by the International Monetary Fund (IMF). It’s used as a unit of account in global trade and finance, particularly in air cargo liability claims. SDR values fluctuate based on a basket of major currencies (USD, EUR, GBP, JPY, and CNY), making it a stable reference for compensation and settlements.
How is SDR Calculated in Air Freight?
SDR calculations in air cargo are based on international conventions that set liability limits for airlines in case of cargo loss or damage. The formula is:
Liability per KG = SDR Rate (Convention-Based) × Cargo Weight (KG)
Two common standards apply:
Warsaw Convention (Older Standard) – 8.33 SDR per KG
Montreal Convention (Current Standard) – 22 SDR per KG
Once the SDR amount is determined, it is converted to local currency using the latest IMF or exchange rate data.
Example Calculation:
Cargo Weight: 100 KG
SDR Rate: 22 SDR per KG (Montreal Convention)
Total SDR: 100 × 22 = 2200 SDR
If the exchange rate is 1 SDR = 1.2255 EUR, then:
Compensation = 2200 × 1.2255 = 2696.10 EUR
Who Needs SDR Calculations?
Freight Forwarders & Logistics Companies
To determine liability limits when handling cargo for airlines.
Airlines & Cargo Handlers
To assess compensation owed in case of lost or damaged shipments.
Shippers & Consignees (Importers/Exporters)
To understand their compensation rights under international treaties.
Insurance Companies
To determine claims in air cargo insurance policies.
What are the Montreal and Warsaw Conventions?
Both conventions are international treaties regulating air transport liability, but they differ in compensation standards:
Warsaw Convention (1929)
One of the first global treaties on airline liability.
Set a low cargo liability limit of 8.33 SDR per KG.
Required shippers to prove airline negligence to claim compensation.
Outdated for modern air freight but still applies in some regions.
Montreal Convention (1999)
Modernized air cargo liability laws.
Raised compensation limits to 22 SDR per KG.
Introduced strict liability – airlines must compensate without requiring proof of negligence.
Accepted by over 135 countries, making it the default standard worldwide.
Why Do These Conventions Exist?
The conventions exist to:
Standardize liability across countries for international air transport.
Protect shippers by ensuring they receive fair compensation for lost or damaged goods.
Create legal certainty in global trade, preventing disputes between airlines and cargo owners.