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MSC Picks Up Costs to Avoid General Average After Maersk Elba Fire

maersk elba
Portuguese maritime police arrive to assist Maersk Elba (Autoridade Marítima Nacional)

By The Maritime Executive 01-19-2021 06:41:00

In a circular to customers issued Monday, number-two container carrier MSC said that it would be picking up unspecified costs in order to avoid a declaration of general average for its customers with cargo aboard Maersk Elba, operated by 2M Alliance partner and number-one container carrier Maersk. 

Maersk Elba sustained an engine room fire off Portugal on December 26, and the damage was serious enough that it left her without propulsion. Maersk chartered two tugs to come to her assistance, and they towed her into port at Algeciras, Spain for repairs, arriving December 31. No injuries were reported. 

Temporary repairs are nearly complete, and the Maersk Elba will set sail on Wednesday for Wilhelmshaven, Germany, where she will be offloaded. Maersk intends to arrange for feeder vessel transfer to carry onward-bound cargo from Wilhelmshaven to the ports of Felixstowe and Rotterdam. 

"The Maersk Elba was carrying cargo for MSC customers as part of our Shogun service," MSC said. "Exceptionally, on this specific occasion, MSC has taken the decision to cover the costs so that the vessel operator [Maersk] will not declare general average. This decision was taken to avoid additional costs or delays for our customers as a result of this incident."

MSC did not disclose the cost or extent of the damage, nor whether any cargo was damaged in the incident. Maersk Elba was carrying a full load at the time of the casualty. 

Declaration of general average would typically require cargo interests to post a GA bond prior to the release of each box. Depending upon the scope of the loss, a declaration of general average can impose significant costs on shippers.