What is it, how it works & how it can help you
What is the general average?
In the early days of international trade, where a vessel was in danger it might be decided to make an extraordinary sacrifice to minimise the loss and save the venture as a whole. It was a case of chance whose cargo was thrown overboard with the ultimate winners being those whose lives were saved or cargoes were delivered.
So began the practice of sharing the loss – or General Average.
THE appointed authority
General Average (GA) necessitates a voluntary and extraordinary sacrifice or expense to save a voyage and such sacrifice has to be successful.
Where such a loss happens, the expenses are shared between all, including the vessel owners. Of course, in the meantime your client wants their cargo and so the appointed authority (an average adjuster) will ask for a large cash deposit to cover the anticipated contribution.
what about the security deposit?
The security deposit can be expensive. In the case of the Yantin Express it was 60% of the cargo value. Your client probably can’t afford or won’t want to set aside this amount of their working capital.
Fortunately, Adjusters will accept a guarantee to pay the contribution from a financially secure company and this is where insurance companies come in.
A guarantee from an insurance company is acceptable security and the cargo can be released against this.
QUICK AND EFFICIENT
Ports around the world are very good at handling shipping containers quickly and efficiently.
Today much of the process of discharging is automated by computers. However, most of the 202 containers on the Yantin Express were deformed, so how do you stack the containers?
That brings us onto the next challenge, where to put these damaged boxes. Usually containers can be stacked 6 high but not if they have lost their structural integrity.
we can help you
Most clients will go years without coming across a general average or request for a salvage guarantee but when they do, they will need the help of a broker experienced in issuing the necessary bonds and GA guarantees.
We can help you through this process ensuring minimal disruption for your client.