What is general average in shipping?

A rule of maritime law that shares the cost of a deliberate sacrifice or expense made to save a ship and its cargo among everyone with property on board, in proportion to its value.

How is a general average contribution calculated?

Average adjusters divide the general average loss by the total value of ship and cargo to get a percentage, then apply it to each interest: at 10%, cargo worth USD 200,000 contributes USD 20,000.

Do I have to pay general average if my cargo was not damaged?

Yes. Contribution depends on the value saved, not the damage suffered, and the cargo is not released until a bond and guarantee — or, uninsured, a cash deposit — is given.

Term

General average

General average is the maritime rule that when a ship's crew deliberately sacrifices property or spends money to save the voyage — jettisoning cargo, paying for salvage — everyone with property on board shares the cost in proportion to its value. Cargo owners must give security before their goods are released, even if their cargo was undamaged.

Also called GA, general average declaration, York-Antwerp Rules, average bondUpdated 13 October 2026

The rule

The York-Antwerp Rules 2016, published by the Comité Maritime International, define a general average act as any extraordinary sacrifice or expenditure intentionally and reasonably made or incurred for the common safety, to preserve the property in a common maritime adventure from peril. The sacrifice is shared by all the contributing interests — ship, cargo and freight — and the right to contribute is not lost because the event may have been one party's fault.

Worked example: the contribution

Ship worth 100 + cargo 50 = 150 contributing · general average of 15 = 10% of 150 → cargo contributes 10% × 50 = 5 · on cargo invoiced at USD 200,000 CIF, that is USD 20,000

The example in Hapag-Lloyd's general average guide. Under the York-Antwerp Rules, cargo's value is taken from the commercial invoice and includes insurance and freight.

Getting the cargo released

An average bond (Form A), signed by the cargo owner.
An average guarantee (Form B), signed by the cargo's insurer.
If the cargo is not insured, a cash deposit instead — a percentage of the cargo's sound value, set by the average adjusters.

A real case

After the Ever Given blocked the Suez Canal in March 2021, its owner declared general average. FIATA warned that this meant shippers had to pay a bond, and that shippers without appropriate insurance cover would be vulnerable to losing their cargo altogether if they did not pay the required cash bond.

The mistake people make

Assuming undamaged cargo owes nothing, or that cheap goods are not worth insuring. Every cargo interest contributes in proportion to its value, and an uninsured shipper has to find a cash deposit before its goods are released.

FAQ

General average: common questions

What is general average in shipping?: A rule of maritime law that shares the cost of a deliberate sacrifice or expense made to save a ship and its cargo among everyone with property on board, in proportion to its value.
How is a general average contribution calculated?: Average adjusters divide the general average loss by the total value of ship and cargo to get a percentage, then apply it to each interest: at 10%, cargo worth USD 200,000 contributes USD 20,000.
Do I have to pay general average if my cargo was not damaged?: Yes. Contribution depends on the value saved, not the damage suffered, and the cargo is not released until a bond and guarantee — or, uninsured, a cash deposit — is given.