Hapag-Lloyd Declares General Average for Yantian Express

The Yantian Express, seen in the North Atlantic on January 15 (Cameron Brunick)

Published Jan 28, 2019 7:04 PM by The Maritime Executive

The fire aboard the container ship Yantian Express has prompted Hapag-Lloyd to declare general average, marking the second time in a year that a container ship fire has led to the apportionment of damage costs among a voyage's cargo owners. 

“In conjunction with declaring general average, the owners will appoint average adjusters, responsible for coordinating the collection of general average securities and all documentation required from parties with interest in cargo, containers, vessel, and fuel," Hapag-Lloyd said in a customer advisory. “Cargo interests (or their insurance companies) should plan to contact the average adjusters directly once they are appointed.”

The details of the general average costs will be determined after a damage assessment at Freeport, Bahamas, the planned port of refuge. The Yantian Express was originally bound for Halifax, but she has diverted for salvage purposes. Hapag-Lloyd says that she is under way using her own propulsion system, with a tug escort standing by. 

Under general average, the sacrifices made to save a vessel and its cargo are shared among all parties with interest in the voyage - the shipowner, the cargo owners and others. It is reserved for extreme events where there is a danger to both the vessel and the cargo unless steps that result in collateral damage are taken. The costs of cargo damage and vessel damage caused by firefighting efforts are allowable under general average, but heat damage, smoke damage and payments to salvors are excluded. 

Typically, cargo owners are required to pay an assessed general average expense before they are allowed to retrieve their cargo. Last year, when the container ship Maersk Honam suffered a severe fire in all bays forward of her accommodations block, shippers were required to pay both a general average bond and a separate salvage bond before recovering their containers. 

The cargo fire aboard the Yantian Express broke out on January 3 as she transited off Canada's eastern seaboard. Efforts to extinguish the fire were launched immediately, but these initial operations had to be suspended due to deteriorating weather. All crew safely evacuated from the Yantian Express onto the Smit Nicobar on January 6, and five returned to the Express to rejoin the firefighting effort on January 9. Hapag-Lloyd reports that the fire is now under control, but the full extent of the damage has not yet been determined.