Shipping & logistics GA

General average

The sharing of deliberate sacrifices and expenses made to save the ship and cargo from a common peril – jettison, salvage fees, firefighting – among the ship and all cargo owners in proportion to their values. It is calculated under the York-Antwerp Rules. When a shipowner declares general average, every receiver must provide security before taking delivery of its cargo; uninsured buyers may have to put up large cash deposits.

Related terms

Cargo insurance (marine cargo insurance)

Insurance against loss of or damage to goods and related expenses during transit. Cover is usually defined by the Institute Cargo Clauses (A, B or C), with war and strikes risks added by separate clauses. The sum insured is typically 110 % of the CIF value. Which party insures depends on the Incoterm; under rules other than CIF and CIP, whoever bears the transit risk should buy its own cover. Claims require a survey report, bill of lading, invoice and a damage report.

Bill of lading (B/L) B/L

The key document of sea transport, issued by the carrier to show that it has received or loaded the goods. It has three functions: a receipt for the cargo, evidence of the contract of carriage and, when issued “to order”, a document of title. Because whoever presents an original can take delivery, it is the backbone of letters of credit and cash-against-documents deals. A “clean on board” B/L shows the goods were loaded in apparent good order.

Explained in the trade handbook

Trade handbook