Key points
- General average shares emergency costs among ship and cargo in proportion to their saved values.
- Most B/Ls apply the York-Antwerp Rules; YAR 2016 is the latest edition, but many contracts still use 1994 or 2004.
- To release cargo you sign an average bond and provide an insurer's guarantee or a cash deposit.
- Final adjustment can take years; uninsured cargo can be held for weeks while a deposit is raised.
- Every consignee in an LCL container is affected, so even small shipments should be insured.
What general average is
General average (GA) is one of the oldest principles in shipping. When a ship and its cargo face a common danger and the master intentionally and reasonably sacrifices property or spends money to save the voyage, the loss is not left with whoever happened to suffer it. Instead, the shipowner and every cargo owner contribute in proportion to the value saved. Typical GA events are fighting a fire on board, throwing cargo overboard to stabilise the ship, paying salvors, being towed after an engine breakdown, and diverting to a port of refuge for repairs. Damage that is accidental and not a deliberate sacrifice, such as cartons soaked by a leak, is particular average and stays with the owner of those goods and their insurer.
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How your contribution is calculated
The adjuster adds up all allowable GA sacrifices and expenses, then divides them by the total contributory value: the saved value of the ship, the cargo and freight at risk. The result is a percentage that each party pays on its own saved value. The York-Antwerp Rules named in your B/L decide what counts. YAR 2016 is the latest edition and the one BIMCO recommends for new contracts, but many B/Ls still incorporate YAR 1994 or 2004, and we found no newer edition as of November 2026. The figures below are an illustration only, not a real case.
| Item | Illustrative value | Note |
|---|---|---|
| GA expenses (salvage, towage, firefighting) | USD 5,000,000 | Allowed by the adjuster under the YAR |
| Saved value of the ship | USD 40,000,000 | Contributes like cargo |
| Saved value of all cargo on board | USD 60,000,000 | Every container, every consignee |
| Total contributory value | USD 100,000,000 | Ship plus cargo |
| GA contribution rate | 5% | 5,000,000 divided by 100,000,000 |
| Your undamaged cargo worth USD 200,000 | USD 10,000 | Your share, payable even though nothing of yours was lost |
Real cases: Ever Given and Dali
| Case | What happened | What cargo owners had to do |
|---|---|---|
| Ever Given, Suez Canal, 2021 | The container ship grounded and blocked the canal, and was refloated on 29 March 2021 after a major salvage operation. The owner then declared general average. | Shippers had to post security before their containers were released. FIATA warned that uninsured cargo could be held under lien until a cash deposit was paid. |
| Dali, Baltimore, 2024 | The container ship struck the Francis Scott Key Bridge in March 2024. In April 2024 the owner declared general average, with Richards Hogg Lindley as adjuster. | Cargo owners had to declare their cargo to the adjuster, identifying consolidated shipments by B/L, and containers stayed under the adjuster's control until security was arranged. |
Both cases show the same pattern. The cargo owners had done nothing wrong and most of their goods were undamaged, yet they could not take delivery until they had given security, and they faced a long wait for the final adjustment. Container ship fires and casualties lead to GA declarations regularly, so this is not a once-in-a-decade risk.
What happens to your cargo: bonds and guarantees
- GA is declaredThe shipowner declares general average and appoints an average adjuster. The carrier or your forwarder notifies cargo interests.
- Carrier holds the cargoThe carrier exercises a lien: no container is released until its consignee has provided GA security.
- You sign the average bondThe cargo owner signs a bond promising to pay its proper contribution, and supplies the commercial invoice to show cargo value.
- Insurer issues a guaranteeYour cargo insurer gives the adjuster an average guarantee. If you are uninsured, you pay a cash deposit set by the adjuster instead.
- Salvage security if neededWhere salvors are involved they may demand separate salvage security before release.
- Cargo is releasedOnce security is accepted, the carrier releases the cargo for onward delivery and customs clearance.
- Final adjustmentMonths or years later the adjuster issues the adjustment. The insurer pays the insured's share; any excess deposit is refunded.
- Call your insurer or its agent as soon as GA is declared
- Insurer issues the average guarantee to the adjuster
- You sign the average bond
- Cargo is usually released without you paying cash
- Your final contribution is paid by the insurer
- Adjuster requires a cash deposit, often a significant percentage of cargo value
- Cargo stays held until the deposit is paid
- Storage, demurrage and lost sales can build up for weeks
- Your money is tied up until the final adjustment, which can take years
- If you cannot pay, the goods may stay under lien
Why insurance matters more in 2026
Carrier liability does not help with GA: the contribution is owed by cargo, not by the carrier. Only cargo insurance on ICC (A), (B) or (C) terms covers it, since all three include GA sacrifice and contributions. In an LCL consolidation every consignee's goods are subject to GA security, so a small importer with a few cartons in a shared container is caught just like a large shipper. As of November 2026 the Strait of Hormuz is closed to container ships and Gulf cargo is routed via Khor Fakkan, Sohar and Jeddah, and the security situation raises the risk of casualties that lead to GA. Note that a carrier ending the voyage at another port, as many did in March 2026, is a different situation from GA and brings its own extra costs; your insurer must be told promptly in either case.
What to do when general average is declared
GA response checklist
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General average quick check
Frequently asked questions
What is general average in shipping?
A rule that all parties to a sea voyage share the cost of a deliberate sacrifice or expense made to save the ship and cargo from a common danger, in proportion to their saved values.
Do I have to pay general average if my cargo is not damaged?
Yes. Contribution is based on the value saved, so undamaged cargo contributes. Your insurer pays it if you have cargo insurance.
Is general average covered by cargo insurance?
Yes. ICC (A), (B) and (C) all cover GA contributions and sacrifices. If the cause is a war peril, check that war clauses are included.
What is an average bond and an average guarantee?
The bond is the cargo owner's signed promise to pay its share. The guarantee is the insurer's undertaking to pay it. Together they let the carrier release your goods.
How long does a general average take to settle?
Release can happen within days once security is given, but the final adjustment often takes years.
What happens if my cargo is uninsured when GA is declared?
The adjuster asks for a cash deposit before release. Your goods stay held until you pay, while storage and demurrage can build up.
Does general average apply to LCL shipments?
Yes. Every consignee in a consolidated container must give security, however small the shipment.
Sources
- BIMCO – General Average: York-Antwerp Rules 2016
- Skuld – York-Antwerp Rules 2016 adopted by the CMI
- FIATA – MV Ever Given owner declares general average (8 April 2021)
- gCaptain – Shipowner declares general average for Ever Given
- Seatrade Maritime – Dali vessel owner declares general average
- gCaptain – Shippers in Baltimore disaster face general average, MSC says
- AGBI – Gulf cargo stuck as shipping calls end of voyage (March 2026)
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