General Average Cargo Loss

Fire on the Ultra Large Container Vessel (ULCV) Maersk Honam fire has claimed 4 lives and will cost the customers with cargo on board £1000’s in General average cargo loss.

What is General Average Cargo Loss?

Any of the shippers who didn’t arrange a marine cargo insurance policy and simply took the industry standard limited liability cover will be in for a nasty shock. Standard limited liability means the compensation you are entitled to is calculated against weight, not value. General Average Cargo Loss, under Maritime law, means that when a vessel transporting your goods at sea encounters a serious issue, as with the Maersk Honam fire tragedy, all the ship’s customers share in covering the losses.

Maersk Honam  ‘General Average Cargo Loss’ declared 9th March

Berthing and discharging operations of the fire-stricken Maersk Honam will result in high extraordinary costs. As a result shipping giant Maersk Line confirmed (GA) on 9th March and appointed Liverpool-based average adjuster Richards Hogg Lindley to collect the necessary GA security. By declaring General Average, all parties with a financial interest in the voyage (i.e. who placed cargo on it) are to proportionally share the losses resulting from the incident.

General Average means all losses, including salvage, port and transfer costs are shared

The many shippers who didn’t arranged any marine cargo insurance will share these costs.  The basic concept of ‘General Average Cargo Loss’ is that all losses, including salvage, port and transfer costs are shared between surviving cargo. Law firm Richards Hogg Lindley has been appointed to collect the necessary GA security from shippers before cargo can be released. This includes a copy of the cargo invoice, an average bond signed by the cargo owner and either an average guarantee for insured cargo signed by its insurers, or a cash deposit for uninsured cargo.

This is why Spatial Global always offer a comprehensive marine cargo insurance

The complexities of international insurance means that many freight forwarders avoid it, but at Spatial Global we consider it to be a value-adding service - so even if we're not handling your export cargo - we positively welcome your export cargo insurance enquiry. Our full-value insurance cover gives you great cover and peace of mind, it will secure your investment in your exported cargo. What's more, in the event of a claim, we handle your insurance issues as if they were our own.