BIFA says don't touch General Average, decries reform-minded review THE British International Freight Association (BIFA) has declared its opposition to changing the rules of General Average, a system under which losses are shared among all parties when ships suffer accidental widespread cargo losses.
The BIFA declaration comes in response to a review undertaken by Antwerp-based Comite Maritime International (CMI), an advisory body, which before the mid-'70s assumed the functions of the UN's International Maritime Organisation in devising international shipping conventions.BIFA contends that this "ancient element of maritime law, where all cargo owners have to chip in a General Average sum to recompense a ship's master forced to sacrifice the cargo, equipment or funds to save a voyage, must be protected".
"The adage is 'if it ain't broke, don't fix it'. This is not just a saying that affects machinery: business systems, such as insurance policies, are equally affected," said BIFA director general Peter Quantrill.
BIFA is now questioning members and initial feedback indicates widespread support for the maintenance of this custom and little need for changes to a well-accepted principle, said its statement.
"When the ship's master declares a General Average, the cargo will not be released until the cargo owners put up a cash bond or the cargo insurers put up a General Average guarantee. Typically shippers may be faced with General Average claim once every decade." said a BIFA statement.
Said Mr Quantrill: "General Average is best described as an ancient unwritten law of marine insurance. It is a process whereby the parties whose interests have been sacrificed or who have incurred extra expense, are recompensed by the contribution of those whose interests have been saved.
"If a General Average is declared, any standard marine policy will include General Average losses so if the goods have been insured the importer should obtain a General Average guarantee from the insurers. If no insurance has been organised then a cash deposit will be needed," he said.
"When our members receive notification that a General Average has been declared for a vessel, whatever the position, their first action is to give the importer immediate notice. The appointed average adjusters will need to be in possession of completed guarantees and bond forms or cash deposit before release of cargo, so it is vital that the importer takes immediate action," Mr Quantrill said.
Most BIFA members promote marine insurance to their customers, which can give peace of mind when a General Average is declared.
The BIFA declaration comes in response to a review undertaken by Antwerp-based Comite Maritime International (CMI), an advisory body, which before the mid-'70s assumed the functions of the UN's International Maritime Organisation in devising international shipping conventions.BIFA contends that this "ancient element of maritime law, where all cargo owners have to chip in a General Average sum to recompense a ship's master forced to sacrifice the cargo, equipment or funds to save a voyage, must be protected".
"The adage is 'if it ain't broke, don't fix it'. This is not just a saying that affects machinery: business systems, such as insurance policies, are equally affected," said BIFA director general Peter Quantrill.
BIFA is now questioning members and initial feedback indicates widespread support for the maintenance of this custom and little need for changes to a well-accepted principle, said its statement.
"When the ship's master declares a General Average, the cargo will not be released until the cargo owners put up a cash bond or the cargo insurers put up a General Average guarantee. Typically shippers may be faced with General Average claim once every decade." said a BIFA statement.
Said Mr Quantrill: "General Average is best described as an ancient unwritten law of marine insurance. It is a process whereby the parties whose interests have been sacrificed or who have incurred extra expense, are recompensed by the contribution of those whose interests have been saved.
"If a General Average is declared, any standard marine policy will include General Average losses so if the goods have been insured the importer should obtain a General Average guarantee from the insurers. If no insurance has been organised then a cash deposit will be needed," he said.
"When our members receive notification that a General Average has been declared for a vessel, whatever the position, their first action is to give the importer immediate notice. The appointed average adjusters will need to be in possession of completed guarantees and bond forms or cash deposit before release of cargo, so it is vital that the importer takes immediate action," Mr Quantrill said.
Most BIFA members promote marine insurance to their customers, which can give peace of mind when a General Average is declared.