General Average Act (York-Antwerp Rules)

The General Average Act, commonly known as the York-Antwerp Rules, is crucial in maritime transportation. As a legal principle, it establishes fair and equitable guidelines for allocating losses and expenses that occur during unforeseen events. These events include accidents, natural disasters, or deliberate acts.

Under this act, if a ship incurs extraordinary expenses or sacrifices cargo to mitigate potential tragedy, shippers, ship-owners, and cargo owners bear a proportion of the resulting costs. For this purpose, it incorporates a standardized framework to calculate and distribute these costs based on the value of the goods involved. 

Importance Of General Average Act  

This principle serves as a safeguard in supply chain logistics by incentivizing cooperation among key players and discouraging self-interest. Plus, it motivates shippers to prioritize protection of onboard cargo and ensures that no single party bears the entire burden of a loss or expense. By sharing the costs between all the financial investing parties, the General Average Act facilitates proper risk management throughout the supply chain.