General Average Declared & Explained

Jan 29, 2019 | Article

According to The Loadstar this week, steamship line Hapag Lloyd have declared ‘General Average’ on their vessel Yantian Express.

The 7,500 TEU container ship was en-route to the port of Halifax this month, when a fire broke out onboard that forced the crew to abandon ship. The vessel has subsequently been towed to Freeport, Bahamas.

So what do we know about general average?

General average is a legal principle of Maritime Law, whereby all parties involved in a particular voyage, are required to proportionally share the losses resulting from a major loss or sacrifice of cargo.

This includes the cargo owners, which means exporters and importers may be liable to pay towards the losses of a major incident on the vessel, such as:

  • a fire on board 
  • the ship gets stranded or grounded 
  • a container stack collapse 

Under extreme circumstances, the entire cargo, or ship, or crew may be at risk. The captain, or shipowners, may take the extraordinary decision to preserve the safety of the ship, cargo or crew, which could also include jettisoning (discharging cargo overboard) to save the rest of the ship’s load.

Where the ship owners suffered loss to preserve the voyage, it MAY be possible for them to declare general average. 

The first rule of general average states ‘There is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure’.

In the case of the Yantian Express, it is reported that the crew attempted to control the fire, while also fighting adverse weather conditions, but had to abandon ship for their own safety. 

The declaration of general average had previously been very rare, but in these days of fluctuating rates and sometimes struggling steamship lines, it is seemingly becoming more frequent. Since 2006, the Hyundai Fortune, MSC Sabrina, Hanjin Osaka and Maersk Honam have all reportedly been the subject of a general average declaration.

Marine or Cargo insurance policies that cover general average are a means of offsetting the risk. Uniserve recommend that you check your policies and if in doubt contact your local Uniserve representative. Cargo insurance is the responsibility of the importer or exporter, although we can provide a range of cargo insurance products upon request.

For further information on Uniserve’s cargo insurance products, or to find out more about our extensive range of ocean freight services, then please call 01375 856060 or email info@ugroup.co.uk.

 

FOLLOW US

Uniserve Careers

View our careers page to find out more about a Uniserve career.

Supply Chain Academy

Delivering outstanding global supply chain learning and intuition capabilities to business.

Unrivalled Ocean Freight

Unparalleled choice and flexibility are synonymous with the UK’s leading Ocean Freight provider.

Award Winning Airfreight

Our record breaking (five times) BIFA Airfreight Award winning team eagerly await your enquiries.

Premium European Services

The UK’s leading independent provides quality services to and from all major locations across Eastern and Western Europe.

Uniserve Careers

View our careers page to find out more about a Uniserve career.

Supply Chain Academy

Delivering outstanding global supply chain learning and intuition capabilities to business.

Unrivalled Ocean Freight

Unparalleled choice and flexibility are synonymous with the UK’s leading Ocean Freight provider.

Keep in Touch

Please subscribe to receive a monthly newsletter of our latest news and articles.

More News…..

Air Export Six Nations

Offering a welcome break from Brexit and preparing for a more global Great Britain, find out about Uniserve’s air export six nations.

Video: This is Scott

Enjoy our latest video. Scott is waiting for news from his freight forwarder regarding his latest shipment from overseas…

Please Share This Article

It only takes a couple of clicks and it would be greatly appreciated! Many Thanks