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General Average Great Ever Given
Who has to pay in the end ?
To what extent does the accident of the Ever Given container ship affect online trade? We explain to you what the big accident is all about, who will have to pay for the damage in the end, and how you as an online retailer can learn something for yourself from the Suez Canal blockade. All this we will tell you in this video.
Average Great Ever Given - online retailers lose everything?
After the unfortunate incident in the Suez Canal with the container ship Ever Given, many online retailers have become wide-awake, because they have either been affected themselves or have now become aware of what it means when a ship reports a major accident. That’s why we want to use this blog article to provide a little clarification on what the big haverie is, why you should care about it as an online retailer, what it means from a legal perspective, and what learning you can take from this event to take necessary precautions for you.
What actually happened
As always, it should be said that we cannot provide legal advice and do not do so with this video, but only inform.
First of all, a brief summary of what actually happened. The container ship Ever Given, launched from the deep-water port in Yangshan, was on its way to Rotterdam. This is on 23 March. ran aground in the Suez Canal, resulting in a blockage of this canal. This blockage also lasted for just under a week. But why did this particular event make headlines around the world? Not only was this ship ‘s cargo delayed in arriving, but the blockage also meant that 300 other ships carrying over $9 billion worth of cargo were unable to complete their planned route, at least within the allotted time. This has a corresponding impact on global trade as a whole, which is why, for example, there is a lack of transparency. temporarily led to a rise in the oil price. What concerns us, on the other hand, is the question of who is actually liable in the event of a major accident. But first, what is it anyway?
What is general average ?
In international maritime law, this is also known as General Average and is regulated in Germany by the German Commercial Code (HGB). Accordingly, the Evergreen shipping company is now entitled to reimbursement of expenses, which is claimed by means of the lien or the demand for payment of a certain sum as security. For online retailers who are not insured for this eventuality, this can pose a threat to their existence. But to make the whole thing more concrete, let’s break down how we would proceed in the event of a major accident.
General average Grosse Ever Given - How to calculate the share to be borne
First of all, there is a damage caused by this accident. This is to be borne jointly by the parties involved. How high this is and how, when, where the further processing takes place, is decided by the average adjuster or also known as the freight forwarder. This is an officially certified expert who is responsible for the administration. This administration also includes the general average adjustment, i.e. the determination and recording of damages, as well as the calculation of the contribution rate. The contribution rate determines how much you have to contribute. This is calculated from the total average loss and the premium capital. What the total damage is, I think is self-explanatory. The contribution capital, in turn, is composed of the value of the ship, cargo, fuel and total freight. If we now calculate the value of the total loss x 100 by the value of the contribution capital, the result is the relative value of the contribution ratio, i.e., for example. 5% or 10% or 13.8%. This contribution rate must be made by everyone who has chartered something on the ship. That is, you would multiply the value of goods by the contribution rate and divide by 100. Then you get the amount to be done by yourself as a depositor. This means that the principle of “in for a penny, in for a pound” applies here. This is especially annoying if you are not insured for this case.
So what can we learn from this?
What can we learn from the "General Average Grosse Ever Given" case?
Mark Steier has already summarized in his word filter article “Onlinehдndler verlieren alles: Ever Given meldet Havarie grosse” what you can learn from this.
I quote from it.
“There are several ways to insure your containers. Most of the time, your forwarding agents will provide you with offers. Make sure that you have also insured the risk of general average (major average). It is better to earn a little less money (or calculate better) than to risk your existence. Even if you are insured, the loss of goods will cost you. It will be weeks, if not months, before you have a replacement and are able to deliver again!
Further, he states, “As a consequence, it is important that you ALWAYS have good risk management. ALWAYS be aware of the risks of your business processes!”
We can only agree with this final statement. If you’d like to read more elaboration on this, we’ve linked the Word Filter post here.
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