General Average is declared on a container ship and you have cargo onboard, if you don’t have insurance it will be costly.
Real Examples of General Average
- Maersk Honam (2018): A fire in the Arabian Sea required Maersk to declare General Average for cost-sharing among stakeholders.
- Northern Jupiter (Jan 2020): An engine fire on January 28 led to a General Average declaration for expense management and ship restoration.
- ONE Apus (Nov 2020) - While General Average was ultimately not declared, this vessel experienced a dramatic cargo loss, with over 1,800 containers going overboard due to heavy weather near Hawaii. Although no General Average was announced, the incident raised concerns among cargo owners about potential liability.
- Ever Given (2021): The grounding and six-day blockage in the Suez Canal on March 23 led to a General Average declaration to address substantial recovery expenses.
- Ever Forward (March 2022) - After grounding in the Chesapeake Bay, the Ever Forward’s owners declared General Average. Although the situation was less severe than the Ever Given, significant costs were involved in freeing the vessel.
- MV Dali (April 2024) - After an incident in Baltimore that damaged a key bridge, this vessel's owners declared General Average to address the damages and related costs.
These incidents show how crucial it is to be prepared for unexpected events. Without adequate insurance, you could be liable for both your cargo's damage and a share of the overall recovery costs.
Understanding Your Risk
Let’s say:
- Ship value: £40 million
- Cargo value: £50 million
- Freight charges: £10 million
- Rescue operation costs: £6 million
- Total value: £100 million
In this case, the General Average (GA) contribution rate is 6% (6 million of the 100 million).
So, if you have one container onboard valued at £50,000, your GA contribution would be 6% of £50,000 = £3,000 plus the loss of your cargo and potential sales.
This highlights the potential financial impact on you, showing how cargo insurance can safeguard you from unexpected costs.
Contact us today for a per shipment or annual quotation: sales@supuk.com