General average and the unexpected impact on cargo owners

© Khunaspix Dreamstime.

The notion of general average can be a thoroughly perplexing one to the modern shipper, developed as it was in the days when steam was still in the process of usurping sail as the principal means of propulsion, and liner shipping had still yet to be born. It was developed in a time when the idea that cargo owners ought to take some share of the losses “resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency” made sense. But things have changed, and in today’s world, where a single voyage can involve hundreds, if not thousands, of individual cargo owners, sorting out a general average claim can take years. But there are ways for shippers to mitigate the risks posed, as this post outlines.