General average explained for China importers
General average shares qualifying losses from action taken to save a ship and its cargo from danger. Cargo owners can face a contribution even when their goods survive undamaged. Check insurance cover promptly and establish what security is requested for release. This guide is from Cambridge China Bridge.
What general average means
General average concerns extraordinary, voluntary and reasonable action taken for the common safety of a ship and its cargo in actual danger. HMRC illustrates this with cargo deliberately thrown overboard to prevent a ship sinking: the resulting loss is shared by the shipowner and owners of the surviving cargo.
An incident notice does not explain your particular exposure. Ask the carrier for the general average declaration, the appointed average adjuster's contact details and the relevant carriage terms. The adjuster is your contact for the contribution paperwork. For ordinary freight planning, see shipping from China to the UK.
Why undamaged cargo can contribute
The contribution concerns the shared rescue, rather than damage to your own cartons. HMRC identifies shipowners, ship operators exposed to lost freight income and cargo owners as contributors. Surviving cargo can therefore face a contribution even when it arrives intact.
Ask the adjuster to explain the cargo value being used, the supporting documents and how the requested security relates to the eventual contribution. Keep the commercial invoice, packing list and transport document together. Do not treat an initial security request as a final settlement figure.
Check cargo insurance before shipping
Ask your insurance broker to confirm in writing whether the proposed policy covers general average contributions and whether the insurer can provide an acceptable guarantee following an incident. Check the insured party, goods description, voyage, insured value, exclusions and claims contact. Request the actual policy wording rather than relying on a freight quote that says insurance is included.
If the supplier arranges insurance, request the certificate and ask how your business would make a claim. Check who will contact the insurer and obtain release paperwork. Use Incoterms explained when discussing the shipping terms, but ask separately about the insurance evidence for your consignment.
Arrange security and cargo release
On receiving a notice, verify it through your known carrier or forwarder contact and notify your insurer promptly. Ask the adjuster for a written release checklist. Establish whether it requests an average bond, an insurer's guarantee or a cash deposit. Have the insurer or a maritime adviser review any undertaking before you sign it.
If uninsured, ask what alternative security the adjuster will accept and how a deposit would be held, reconciled and returned. Verify payment instructions independently. Obtain written confirmation that security has been accepted and that the carrier has authorised release before booking collection. Check UK customs clearance separately rather than assuming this confirmation covers customs.
Control the costs while you wait
Ask the forwarder where the goods are, whether collection is possible and which storage or container charges are accruing. Request a written plan for clearance, collection and unloading. Our shipping guide explains demurrage and detention; deal with those charges alongside the general average paperwork.
Keep a file containing notices, signed documents, security receipts, release confirmation and insurer correspondence. Ask who will send the final adjustment and reconcile it against any deposit. For future orders, record insurance and incident handling alongside the costs in understanding your landed price.
Frequently asked questions
Do I pay general average if my cargo is undamaged?
You can face a contribution even if your goods survive intact. General average shares qualifying losses incurred for the common safety of the ship and cargo.
Does cargo insurance cover general average?
Ask your broker to confirm cover under your actual policy, including exclusions and insured value. Also ask whether the insurer can provide the guarantee requested for cargo release.
How do I get my goods released after general average?
Obtain the adjuster's release checklist, involve your insurer and arrange the requested security after review. Get written acceptance and carrier release confirmation, then check customs and collection arrangements.
What if I have no cargo insurance?
Ask the adjuster what alternative security it will accept, including whether a cash deposit is requested. Get advice before signing an undertaking, and confirm how any deposit will be reconciled.