Marie Maersk update 4 - General Average declared, understand General Average and guidelines for shippers
Recently on 4th Sept’ 2025 Maersk has declared General Average for Marie Maersk after the fire incidence - for the additional charges that were incurred during the resources utilized for firefighting and damage to vessel.
As explained in our earlier blogs, fire broke out on Marie Maersk on 13th Aug 2025 which could be completely controlled by 22nd Aug’ 2025. Their was a crew change the took place at Cape Town on 31st Aug’ 2025.
What is general average in maritime industry – This term defines the share of loss after a voluntary sacrifice or the expense made to protect the vessel and cargo at the time of crisis. The sharing is done by all the stake holders including the vessel owner, cargo owners and the expense is divided between them as per the ratio of proportion of the cargo. It is declared by shipping line occasionally depending on the situation. The general average covers the loss to both vessel and cargo when the voluntary sacrifice is made to protect the common interest.
Example – In this case, Maersk hired firefighting resources to protect the vessel and cargo and few containers were burned and damaged. Later Maersk appointed Sedwick Global Marine to manage the loss assessment and payment process. The vessel is expected to reach Tanjung Pelepas port, Malaysia on 14th Sept/ 2025. This is a large vessel with the capacity of 19,000 TEU and was running with complete utilization.
How the cargo is released at destination once General average is declared
In case general average is declared then the shipping line would need a Latter of Guarantee to release the cargo, these can be arranged in two ways
Usually the letter is provided by the cargo insurance agent as most of the export cargo is insured. The letter means the guarantee of payment, which is done by the insurance agent on behalf of the shipper to shipping line. Shippers does not need to be involved much as the documentation / payment is taken care by insurance agent.
In case the shipper/consignee has not done the insurance – then either of them needs to provide the letter of guarantee which can be highly expensive.
Once General insurance is declared, the loss is assessed by an average adjuster and the final assessed value is shared proportionately.
The principle of the General average is guided by international code of “York-Antwerp rules”. Though this process is being followed since centuries but was first documented and established in 1890 and is regularly updated by the “Comite Maritime International” CMI to have a strong framework as per the current time.
Steps to be followed by the shipper to get the cargo released from the containers loaded on Marie Maersk
In this case the shipper needs to contact Maersk office
Get the required advisory, provide the signed documents to their respective agents
From here insurance agents to take up shipping line and provide the letter of guarantee to Maersk
Then cargo can be released hassle free at destination
Image credit - https://www.marinetraffic.com
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