The Economic Contribution of General Average

General Average is a maritime principle that shares the financial burden of losses among all stakeholders in a shipping venture when an emergency occurs, such as a storm or shipwreck. If cargo is intentionally sacrificed to save a vessel, all interested parties contribute to cover the losses. This equitable distribution of costs encourages risk-sharing and financial security, ultimately promoting smoother global trade. Without General Average, owners would avoid risky routes, leading to higher shipping costs and potential trade disruptions, affecting prices and availability of goods worldwide. Thus, it supports economic stability in international shipping.