What is General Average?
What happens if you have a container on a ship that gets stuck somewhere and the ship has related expenses to free itself. The policy of General Averages can be a surprise lurking for those of us involved in importing goods via containers. In 2021 the vessel Ever Given blocked the Suez Canal for 6 days. The Egyptian government estimated associated costs at $1 Billion. When General Average was declared regarding the event, final cost once decided, will be divided across all Ever Given container holders
General Average allows a ship owner to bill all cargo holders a portion of the cost incurred due to the vessel being stuck, re-floated, or even just delayed. “General Average can be declared in any situation that the master of the vessel has to take action to make an extraordinary sacrifice for the common safety of the vessel...The most common example of this is the jettison of cargo during a storm to lighten the load and save the voyage.”
One way to avoid these types of surprise charges, and sometimes crippling bills, is to have All-Risk Container Insurance. This will help cover the bill and prevent delays in receiving your cargo due to a need for a cash deposit to release the cargo upon arrival at the local port.
For more information, read this article from Trade Risk Guaranty. . Example of General Average | M/V MSC Sabrina - March 2008 (traderiskguaranty.com)
For information on how Acadian manages its international shipments, particularly when we handle a shipment direct to our customers, please reach out to us through our website or give us a call.