General Average – a useful guide on issues arising in container shipping

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General Average is an insurance concept that might make a lot of sense to shipowners, the old salts that crew their vessels and the men of London’s Square Mile who insure it all – but for the thousands of freight forwarders that fill the slots of the world’s box fleet, it is mostly arcane and confusing. All they know is that once General Average is declared you might as well get on with something else, because whatever cargo you had booked aboard a ship involved in a casualty, it won’t be seen for months.

Why? Because while in olden days there were a limited number of cargo owners per vessel, on today’s containerships there can be thousands.

This piece from a Singapore-based claims correspondent is a really useful guide for anyone confused by General Average: “Since there are so many interests, it not only becomes difficult to manage a General Average situation but also there would be substantial costs which may be incurred for the collections of securities from the various interests.” .