Picture this. Your container crosses the ocean without a scratch. The goods inside are perfect. Then you receive a notice — from the carrier, or from an “average adjuster” you have never heard of — telling you that you cannot collect your cargo until you post security, sometimes a cash deposit worth a meaningful slice of the shipment’s value. You did nothing wrong. Another shipper’s box, or the ship itself, was the problem. Welcome to general average.
General average is not breaking news, which is precisely why it is worth understanding before it lands on you. It is one of the oldest rules in commercial law, and it is quietly becoming more relevant. Ship fires and casualties are trending the wrong way, and every serious one can trigger a general average that pulls in every cargo owner aboard — including the ones whose containers were never touched.
What general average actually is
When a ship faces a common danger and the master makes a deliberate sacrifice or an extraordinary expenditure to save the whole venture — flooding a hold to fight a fire, hiring salvors to refloat a grounded vessel, jettisoning containers to keep the ship stable — the cost of that rescue is not borne by whoever happened to be nearest the damage. It is shared proportionally among everyone with a financial stake in the voyage: the shipowner and every cargo owner on board.
The principle is shared sacrifice. Because the action saved the entire venture, everyone whose cargo was saved contributes to the cost, in proportion to the value they had at risk. The idea has roots in the sea laws of ancient Rhodes and survives today in the York-Antwerp Rules, a private code most recently revised in 2016 that bills of lading incorporate by reference. If you have shipped containers, your bill of lading almost certainly already binds you to it, whether or not you have ever read the clause.
The part that catches people off guard is that it applies even when your container is perfectly fine. You are not being asked to pay for damage to your own goods. You are being asked to pay your share of saving the voyage that carried them. Undamaged cargo and a general average bill are entirely compatible, and most shippers only learn this the week it happens to them.
Why you are hearing about it more
Casualties are becoming more frequent, not less. Fire is the headline risk. The Allianz Safety & Shipping Review 2025 again named misdeclared cargo among the leading causes of container-ship fires; marine insurer Gard logged close to twenty container fire incidents in 2025, with lithium-ion batteries a leading driver; and the National Cargo Bureau has found that roughly 2.5% of inspected dangerous-goods containers were misdeclared. More battery cargo and more misdeclaration add up to more fires at sea.
Collisions are the other side of it. Aging, poorly maintained “shadow fleet” tonnage operating in contested waters raises the odds of exactly the kind of casualty that triggers a shared-cost rescue, as the recent collision near Fujairah showed.
Any one of these can become a general average. In November 2025, a fire aboard the ONE Henry Hudson at the Port of Los Angeles led to a general average declaration and the appointment of an average adjuster to collect contributions from cargo interests. Maersk has declared general average after a container fire aboard the Marie Maersk. And the case everyone remembers, the Ever Given grounding in the Suez Canal in 2021, dragged thousands of cargo owners into a shared bill for a ship that was eventually refloated without losing their boxes. This is not a 2026 story. It is a structural one: more steel on the water, more battery cargo, and more contested routes mean more declarations over time.
What happens to your cargo: the hold and the security
A general average declaration puts your cargo on hold until you post general average security. The shipowner declares general average and appoints an average adjuster — a specialist firm — to work out each party’s contribution. Before any cargo is released, the adjuster collects security from the cargo interests. Until you provide yours, your container does not move.
There are two paths, and the gap between them is large. If your cargo is insured, your underwriter issues an average guarantee and you sign an average bond; your insurer carries the contribution, and you usually collect your box without fronting any cash. If your cargo is uninsured or underinsured, you post a cash deposit — a percentage of the cargo’s CIF value, set by the adjuster — before release.
How large can the deposit be? It depends on the casualty, and it can be brutal. The Maersk Honam fire in 2018 is the cautionary tale. The adjuster set salvage security at 42.5% of the CIF value of the cargo, with a further 11.5% as general average security — roughly 54% in total. A shipper with $10,000 of goods in a container had to put up about $5,400 to get it released. Honam was an extreme case, but it shows where the ceiling sits when a rescue is expensive.
The other surprise: it takes years
General average is slow. The adjustment — the line-by-line accounting of who owes what across the ship and every cargo interest — routinely takes many months, and for large casualties, several years. Your deposit sits in a joint account for that entire period. You keep the paperwork so you can claim any refund once the final adjustment is published, because a portion is often returned. Plan for the cash to be tied up for a long stretch, not recovered the following week.
The one thing that turns a crisis into a paperwork exercise
Marine cargo insurance is the difference between a phone call and a cash-flow event. Proper all-risks cargo cover includes general average. Your underwriter posts the guarantee and handles your contribution, and you typically collect your cargo without fronting a deposit. Without it, you write the check yourself and then wait years for whatever comes back.
It also matters who is supposed to be holding that risk in the first place. Under most Incoterms the cargo interest — frequently the buyer — carries the general average exposure, which is why “is it insured, and who is insuring it?” is a question to settle before the goods sail, not after a fire. The bill of lading is where the general average clause lives; the insurance is what keeps that clause from turning into a deposit you fund yourself.
Need help interpreting this disruption or your shipment?
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When a casualty hits, your first problem is visibility
The moment you hear a vessel is on fire or aground, the first question is not legal — it is “which of my containers are on that ship, and where are they right now?” If you ship across several carriers and move dozens or hundreds of boxes, answering that quickly is the whole game. You need to size your exposure, pull the commercial invoices and cargo values the adjuster will demand, and track which boxes are held versus still moving.
The shippers who get through a general average cleanly are the ones who can see their cargo across every carrier in one place and produce documentation on demand. The ones who struggle are emailing five carriers asking whether their box was on the casualty vessel, and assembling values from spreadsheets while the deposit clock runs. General average is unavoidable once it is declared, but slow, blind handling is not. If you want to see how ops teams track multi-carrier cargo and pull exception documentation from a single view, walk through it here.
Before it ever happens
- Confirm your cargo is insured on all-risks terms that include general average and salvage. This is the single biggest protection you have.
- Know your Incoterms, so you know whether the general average risk is yours or your counterparty’s before goods move.
- Keep clean, retrievable commercial invoices and cargo values — the average adjuster will ask for them.
- Make sure you can identify quickly which containers sit on which vessel, across every carrier you use.
General average is the rare shipping cost you cannot negotiate down after the fact. Honam shippers paid their share whether they liked it or not. All of the leverage is upstream: insure properly, know who bears the risk, and be able to see your cargo the day the news breaks. Do that, and a general average declaration becomes a manageable process rather than a scramble.
Further Reading
- Company declares General Average after container ship fire in LA — SAFETY4SEA
- Maersk Declares General Average After Container Fire Aboard Marie Maersk — The Maritime Executive
- Ever Given, general average and why shippers will share the costs of a ship’s rescue — Supply Chain Dive
- Shippers with Cargo on Maersk Honam Face Hefty Bill to Get it Released — gCaptain
- York-Antwerp Rules 2016: a summary — HFW
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