What About General Average?

- Jun 13, 2019-

In recent days, frequent maritime accidents, including the explosion of KMTC dangerous goods, MSC shipping and maersk south accidents, have aroused the great concern of the owners of the general average.

General Average means the legal system in which the special sacrifices and expenses paid directly for the purpose of common safety and for the purpose of taking measures intentionally and reasonably are apportioned by each beneficiary in proportion to the common risks suffered by the ship, goods and other property during the same maritime voyage.General average is one of the oldest and most distinctive maritime law systems in the world. The purpose of general average is to encourage the ship to take active measures to make the ship out of danger when the cargo is in common danger, and to ask the beneficiary to share on the basis of equity principle.

It is well known that general average requires several basic requirements:

1. Ships, goods and other property that are on the same sea voyage and are exposed to common and real dangers;

2. The measures taken are intended and reasonable for the common safety of ships, goods and other property;

3. The sacrifices and expenses incurred are exceptional;

4. The measures taken have had some effect in achieving the purpose of preserving the ship, goods and other property in whole or in part.

 

General average system, as an ancient system, is accompanied by the emergence and development of shipping industry, and has been constantly improved in practice and application.As a system to balance the interests of all parties in the shipping industry, the general average system plays an important role.Of course not.

First, in the application of general average, the ship should take the initiative, such as in the case of collision accident, fire at sea, etc., the ship is always informed of the accident and loss at the first time, and generally makes the decision whether to declare general average under the most favorable circumstances.

Second, in terms of the goods before the only accept the ship to announce the general average, submit the corresponding total loss guarantee, if you don't think a total loss, after the arbitration or litigation to overturn the ship's total loss, which requires the long time cost and huge costs, goods mainly cautious measure do good for yourself if you really;

Third, if the cargo wants to pick up the goods, it needs to pay a certain percentage of the value of the deposit, and can not be processed according to the adjustment results until the end of the adjustment.Of course, if the value of goods is not high, the owner of the cargo, especially the consignee will choose to abandon the goods, which will become the trouble of the owner.

To sum up, there will always be cargo owners to question the total loss and doubt, think their goods suffered an accident, may also produce a delay, originally feel innocent, but also take out a part of the deposit to pick up the goods.Often find in dealing with the actual cases, the bulk of the owner often arrange the insurance for the goods, to deal with relatively positive, for the owner of container cargo, the situation is more complex, if happened to arrange insurance in time, the consignee may measure whether to pay the security deposit, may choose to abandon the goods.For example, in many cases handled by the author before, it is already very heavy work to inform the shipper one by one, and there are always customers with relatively low goods value choosing to abandon the goods, preferring to risk the risk of trade disputes with the shipper.If the goods cannot be picked up because of this, the shipping company will be exposed to the risk of container detention.

There is no perfect system, and neither is general average.Today's Shared losses are relatively fair, but the process is time-consuming and costly.First of all, as shippers, will stand on their own point of view to do some risk diversification arrangements.The shipowner will arrange insurance for the ship. In case of common loss, the corresponding insurance will take effect and reduce the risk of shipowner to the greatest extent.Shippers, too, should make good use of the tools of insurance, especially now that freight insurance is so mature and rates so friendly.If an accident happens, you can inform the insurer at the first time, submit margin to release the goods, and manage his co-loss for several years without any economic pressure.Secondly, we should actively participate in the handling of the accident, communicate closely with the carrier, and timely understand the case handling situation. Accidents are always not expected by everyone, and the shipping company is often the most injured. Active communication is the way to solve the problem