What a Joint Average Adjuster Is
Interlink編集部What is a General Average Adjuster?
A General Average Adjuster is a specialist who, when general average is declared, organizes the costs and sacrifice losses recognized as general average and calculates each party’s contribution amount based on the values of the vessel, cargo, freight, and other relevant interests.
In English, this specialist is called a General Average Adjuster or G.A. Adjuster.
General average is not settled immediately after an incident. The General Average Adjuster reviews the circumstances of the accident, salvage costs, sacrifice losses, expenses at ports of refuge, values of the vessel and cargo, freight, information from insurance companies, and other relevant documents, and then conducts the final general average adjustment.
What is important in practice is that the General Average Adjuster is a professional who adjusts general average, not an agent of the cargo owner. Cargo owners and freight forwarders should respond to the adjuster’s guidance while coordinating with insurance companies, insurance brokers, and specialists as necessary to verify the details from their own standpoint.
Scope Covered in This Article
| Topic | Main Contents | Key Practical Points |
|---|---|---|
| Role of the General Average Adjuster | Organizing general average costs, sacrifice losses, values, and contribution amounts | The adjuster calculates contribution amounts but does not act as the cargo owner’s agent. |
| Position among stakeholders | Relationship with the shipowner, cargo owner, insurer, freight forwarder, and NVOCC | Each party’s role must be distinguished clearly. |
| Difference from a surveyor | Difference between general average adjustment and damage survey | The surveyor investigates damage; the adjuster calculates general average contributions. |
| Relationship with the General Average Declaration | Initial notice, required documents, submission destination, deadlines, and cargo release requirements | The declaration stage and the final adjustment statement stage must not be confused. |
| Relationship with insurers | General Average Guarantee, insurance notification, contribution payment, and possible recourse | Submitting documents to the adjuster does not automatically complete insurance handling. |
| Final adjustment process | Preparation of the General Average Adjustment Statement and final settlement | Final settlement may take years after cargo release. |
Role of the General Average Adjuster
The primary role of the General Average Adjuster is to organize the costs and losses recognized as general average and calculate the contribution amounts for each involved party.
In calculating general average contributions, the York-Antwerp Rules are often applied. Sometimes the applicable general average rules are specified in the terms on the back of the B/L or in the charter party agreement.
| Role | Description | Practical Significance |
|---|---|---|
| Defining the scope of general average | Organizing which costs and sacrifice losses are recognized as general average | Not all accident-related costs qualify as general average. |
| Verification of values of parties involved | Confirming vessel value, cargo value, freight, and other relevant values | Forms the basis for calculating contribution ratios. |
| Guidance on necessary documents | Guiding parties on the General Average Bond, Cargo Value Declaration, General Average Guarantee, deposits, and other documents | Encourages submission of documents required for cargo release. |
| Calculation of contribution amounts | Apportioning amounts recognized as general average to each involved party according to value | Determines the final general average contribution payable. |
| Preparation of the General Average Adjustment Statement | Summarizing the adjustment results in a final adjustment statement | Forms the basis for final invoicing, insurer handling, and deposit settlement. |
Position of the General Average Adjuster
General Average Adjusters are usually appointed by the shipowner or shipping company. However, they are not simply agents who accept the shipping company’s claims as they are. They are specialists who adjust general average based on the applicable rules and documentation.
On the other hand, the General Average Adjuster is not an agent of the cargo owner. Since the adjuster does not negotiate individually on behalf of the cargo owner’s interests, cargo owners and freight forwarders need to coordinate with insurance companies and specialists as necessary to verify the contents from their own standpoint.
| Stakeholder | Position | Main Role | Important Notes |
|---|---|---|---|
| General Average Adjuster | Specialist who adjusts general average | Organizes general average costs, sacrifice losses, values, and contribution amounts | Not an agent of the cargo owner. |
| Shipping Company / Shipowner | Party declaring general average | Appoints the adjuster and informs the parties involved | May require security before cargo delivery. |
| Cargo Owner / Beneficial Owner | Party required to contribute to general average | Submits the General Average Bond, Cargo Value Declaration, invoice, and related documents | Needs to verify the contents from its own standpoint, not merely follow the adjuster’s guidance passively. |
| Cargo Insurance Company | Handles matters under the insurance contract | Involved in General Average Guarantees, payment of contributions, review of recourse, and related matters | Early notification to the insurer is important. |
| Freight Forwarder / NVOCC | Practical contact point for the cargo owner and document coordination | Coordinates the adjuster’s guidance, insurer contact, document submissions, and cargo release | Do not confuse the roles of the adjuster, insurer, and cargo owner. |
Difference from a Surveyor
Both the General Average Adjuster and the surveyor appear in cases of maritime or cargo accidents, but their roles differ.
| Item | General Average Adjuster | Surveyor |
|---|---|---|
| Main role | Organizes costs and losses recognized as general average and calculates contribution amounts | Inspects the damage status, cause, and extent of cargo or vessel damage |
| What is verified | General average costs, sacrifice losses, vessel value, cargo value, freight, and contribution ratios | Cargo damage, wet damage, deformation, quantity shortage, accident cause, damage amount, and related facts |
| Primary documents | General Average Declaration, General Average Bond, Cargo Value Declaration, General Average Guarantee, General Average Adjustment Statement | Survey Report, photographs, inspection records, accident report, damage valuation documents |
| Appointed by | Often appointed by the shipowner or shipping company | May be appointed by the insurer, cargo owner, shipping company, or other interested party |
| Relationship with cargo owner | Not an agent of the cargo owner; specialist in adjusting general average | Specialist who confirms cargo damage facts depending on the client |
| Relation to general average | May use survey reports and damage documents as references in organizing general average loss amounts | Survey results may affect the general average adjustment |
If there is cargo damage, the details of the Survey Report may influence the general average adjustment. For example, when sorting out whether cargo damage qualifies as sacrifice loss under general average, particular average, or ordinary loss unrelated to general average, the Survey Report and photographic evidence are important.
Matters Confirmed by the General Average Adjuster
The General Average Adjuster comprehensively reviews not only the accident situation but also the costs, losses, values, contractual conditions, and submitted documents.
| Items to Confirm | Relevant Documents | Practical Implications |
|---|---|---|
| Details of the maritime casualty | Accident report, notification from the shipping company, General Average Declaration | Confirm whether a general average event existed. |
| Costs recognized as general average | Salvage cost breakdown, expenses at port of refuge, emergency repair costs, related invoices | Clarify the scope of costs subject to apportionment. |
| Sacrifice loss | Stowage records, firefighting records, Survey Report, photographs | Confirm whether the loss is recognized as a general average sacrifice. |
| Vessel value | Documents from the shipowner, valuation reports | Check the amount for the vessel side’s contribution. |
| Cargo value | Invoice, Packing List, Cargo Value Declaration, insurance policy | Confirm the amount for the cargo side’s contribution. |
| Freight | B/L, freight invoice, transport contract | Confirm the amount if freight is subject to apportionment. |
| Contracts and rules | Terms on the back of the B/L, charter party contract, York-Antwerp Rules | Check under which rules the adjustment will be made. |
| Status of submitted documents | General Average Bond, General Average Guarantee, deposit, Cargo Value Declaration | Confirm documents required for cargo release and subsequent settlement. |
Relationship with the General Average Declaration
When general average is declared, the shipper or freight forwarder receives a General Average Declaration and related notification documents.
The General Average Declaration may include information such as the occurrence of general average, vessel name, voyage number, B/L number, required documents, submission destination, submission deadline, and details of the General Average Adjuster.
Upon receipt of the General Average Declaration, shippers and freight forwarders need to contact their insurance company or insurance broker to request issuance of a General Average Guarantee and to check necessary documentation.
This declaration-stage document should be distinguished from the General Average Adjustment Statement, which is prepared later by the General Average Adjuster to show the final adjustment results and contribution amounts.
Dealing with the Adjuster and the Insurance Company
Handling matters with the General Average Adjuster and with the insurance company must proceed simultaneously. Simply submitting documents to the adjuster does not complete the insurance company’s requirements.
| Contact Party | Main Actions | Points to Note |
|---|---|---|
| General Average Adjuster | Submit the General Average Bond, Cargo Value Declaration, invoice, General Average Guarantee, deposit, and related documents | Confirm submission destination, deadlines, whether originals are required, and whether PDFs are acceptable. |
| Insurance Company / Broker | Request issuance of the General Average Guarantee, confirm insurance terms, handle cargo damage claims, and arrange payment of apportioned sums | Even with insurance coverage, automatic handling is not guaranteed; early notification is necessary. |
| Shipper / Cargo Owner | Prepare signed documents, valuation materials, insurance details, and cargo inventory | Delays in confirmation of signatories or cargo value can affect cargo release. |
| Shipping Company / Agent | Confirm cargo delivery conditions, exchange of D/O, and feasibility of cargo pickup | Even after submission to the adjuster, actual cargo release must be confirmed separately. |
Cargo Value and Contribution Amount Calculation
The general average contribution is not determined simply by cargo quantity or weight. The General Average Adjuster apportions the recognized general average expenses and sacrifices based on the value of the saved vessel, cargo, freight, and other relevant values.
| Value Type | Documents to Check | Notes |
|---|---|---|
| Cargo value | Invoice, Cargo Value Declaration, insurance policy | Additional components differ depending on FOB, CFR, or CIF valuation terms. |
| Freight | Freight invoice, B/L, transport contract | Verification of freight is important, especially under FOB or CFR terms. |
| Insurance premium | Insurance policy, premium details | Checked when organizing CIF values. |
| Cargo damage amount | Survey Report, photographs, damage details, repair estimate | Need to distinguish whether cargo damage is general average sacrifice or particular average loss. |
General Average Adjustment Takes Time
General average adjustment is not completed immediately after the accident. Final settlement may take several years.
| Factors Causing Delays | Impact on Adjustment | Practical Response |
|---|---|---|
| Many involved parties | Documents must be collected from the shipowner, multiple shippers, NVOCCs, and insurance companies. | Continuously monitor document submission status. |
| Time required to confirm cargo value | Invoice, valuation terms, freight, and insurance premium need to be confirmed. | Prepare Cargo Value Declarations accurately. |
| Cargo damage present | Need to distinguish whether damage qualifies as general average sacrifice or usual loss. | Preserve Survey Report and photographs. |
| Large salvage costs | Need to verify the relation between the salvage contract, salvage charges, and Salvage Security. | Manage salvage-related documents separately from general average documents. |
| Claims and liability issues | Issues may arise regarding unseaworthiness, carrier liability, and insurer recourse. | Coordinate with the insurance company and specialists. |
Practical Workflow
The general flow when a General Average Adjuster is involved is as follows.
| Stage | Action | Notes |
|---|---|---|
| 1. General Average Declaration | The shipping company declares general average and notifies the parties involved. | Confirm the information of the General Average Adjuster. |
| 2. Receipt of instructions from adjuster | Check required documents, submission destination, and deadlines. | Contact the insurance company simultaneously. |
| 3. Preparation of cargo release documents | Prepare the General Average Bond, Cargo Value Declaration, General Average Guarantee, cash deposit, and related documents. | Confirm signatory, cargo value, and insurance status. |
| 4. Confirmation of cargo damage | If damage exists, arrange a surveyor and obtain the Survey Report. | This may affect whether the damage qualifies as sacrifice loss under general average. |
| 5. Confirmation of cargo release | Confirm D/O exchange, cargo discharge, and delivery feasibility. | Salvage Security may be required separately. |
| 6. Collection of documents by adjuster | Gather cost, damage, and value documentation from each involved party. | Adjustment may take a long time in practice. |
| 7. Preparation of General Average Adjustment Statement | The adjuster calculates contributory shares and prepares the General Average Adjustment Statement. | Confirm the content with the insurance company. |
| 8. Review of adjustment results | Check contributory shares, cash deposits, General Average Guarantees, and insurance coverage. | If there are uncertainties, consult with the insurance company or specialists. |
| 9. Final settlement | Process payments of contributory shares, refunds of cash deposits, and additional claims. | Keep records and prepare for possible recourse. |
If You Have Doubts About the Adjustment Results
If there are doubts about the results prepared by the General Average Adjuster, it is risky for the shipper or freight forwarder to unilaterally decide to refuse payment.
In particular, when issues involve unseaworthiness, carrier liability, salvage expenses, cargo damage amounts, cargo values, insured values, or interpretation of B/L clauses, it is necessary to confirm these points while coordinating with the insurance company or experts.
| Issue | Points to Confirm | Action |
|---|---|---|
| Feeling the contributory share is too high | Cargo value, contributory share ratio, scope of general average expenses | Share the General Average Adjustment Statement with the insurance company and request review. |
| Doubts about how cargo damage is treated | Survey Report, cause of damage, whether it qualifies as sacrifice loss under general average | Cross-check the Survey Report and adjustment details. |
| Suspected carrier liability | Unseaworthiness, cause of accident, B/L clauses, applicable law | Consult with the insurance company, lawyers, or specialists. |
| Unclear coverage under insurance | Insurance terms, insured amounts, deductibles, uninsured portions | Confirm with the insurance company or insurance broker. |
| Uncertainty about cash deposit refunds or additional claims | General Average Adjustment Statement, deposited amounts, final contributory share, balance | Confirm with both the adjuster and the insurance company. |
Common Trouble Patterns
| Issue | Cause | Countermeasure |
|---|---|---|
| Consulting the adjuster as if they are the shipper’s agent | Misunderstanding the adjuster's position | The adjuster is not the shipper’s agent; coordinate with the insurance company or experts. |
| Assuming insurance company processes are complete just because documents were submitted to the adjuster | Confusing adjuster handling with insurance company handling | Requests for General Average Guarantee issuance and insurance claims should be separately addressed to the insurance company. |
| Confusing the roles of surveyor and adjuster | Not understanding the difference between damage survey and general average adjustment | The Survey Report documents damage; the adjuster calculates contributory shares and organizes them. |
| Not knowing how to respond when dissatisfied with adjustment results | Unable to interpret adjustment statements or clarify areas of dispute | Share the General Average Adjustment Statement with the insurance company and involve experts if needed. |
| Delay in some shippers' documents in LCL consolidation | Inability to manage submission status of multiple shippers | Manage General Average Bonds, Cargo Value Declarations, and insurance status per shipper. |
| Forgetting to handle adjustment after cargo release | Misunderstanding that the process ends when cargo is released | Continue managing General Average Guarantees, cash deposits, adjustment statements, and final billing. |
Common Misunderstandings
| Misunderstanding | Correct Understanding | Practical Caution |
|---|---|---|
| The General Average Adjuster represents the interests of the shipper. | The General Average Adjuster is a specialist who adjusts general average, not the shipper’s agent. | Consult the insurer or specialists if the cargo side needs its own review. |
| No need to contact the insurance company once documents are submitted to the adjuster. | Accident notification to the insurance company, requests for guarantee issuance, and insurance handling are separate requirements. | Contact the insurer at the same time as responding to the adjuster. |
| The adjustment results cannot be questioned. | If there are questions, check with the insurance company or experts and clarify issues. | Review the General Average Adjustment Statement before final settlement. |
| The surveyor and General Average Adjuster have the same role. | The surveyor investigates damage, while the General Average Adjuster calculates contributory shares. | Use the Survey Report appropriately in the general average adjustment. |
| General average procedures end once cargo is delivered. | General Average Adjustment Statements and final contributory share settlements may continue for years after cargo delivery. | Keep documents until the final adjustment and settlement are complete. |
| The General Average Declaration and General Average Adjustment Statement are the same document. | The declaration is an initial-stage notice, while the adjustment statement is the later settlement document. | Manage declaration-stage documents and final adjustment documents separately. |
Points Freight Forwarders and NVOCCs Should Confirm
| Check Items | Details to Confirm | Party to Confirm With |
|---|---|---|
| General Average Adjuster | Confirm the name, contact information, submission address, and person in charge of the adjuster. | Shipping company, adjuster, overseas agent |
| General Average Declaration | Confirm vessel name, voyage number, B/L number, incident details, and required documents. | Shipping company, adjuster, NVOCC |
| Submission deadline | Check whether there is a deadline that could affect cargo release. | Adjuster, shipping company, CFS |
| Required documents | Confirm the General Average Bond, Cargo Value Declaration, invoice, General Average Guarantee, and instructions regarding deposits. | Adjuster, shipper, insurer |
| Insurance company contact | Confirm the shipper’s marine cargo insurance status and contact details for the insurer and broker. | Shipper, insurer, insurance broker |
| Surveyor coordination | If there is cargo damage, secure the Survey Report and photographs. | Surveyor, insurer, shipper |
| Cargo value | Verify invoice, FOB/CFR/CIF terms, freight, and insurance premium. | Shipper, customs broker, insurer |
| Salvage Security | Check whether separate Salvage Security or salvage guarantee letters are required. | Shipping company, salvors, P&I Club, insurer |
| Adjustment results | After receiving the General Average Adjustment Statement, confirm the contents with the insurer. | Adjuster, insurer, shipper |
| Record keeping | Preserve incident notifications, submitted documents, adjustment statements, and correspondence with the insurer. | Internal operations team, sales team, insurer |
Documents to Check in Practice
- General Average Declaration
- Guidance documents from the General Average Adjuster
- B/L and terms and conditions on the back
- House B/L and Master B/L
- Invoice
- Packing List
- Freight Invoice
- Insurance policy or insurance certificate
- General Average Bond
- Cargo Value Declaration
- General Average Guarantee
- Instructions regarding the General Average Deposit
- Survey Report
- Photographs, inspection records, damage details
- Salvage guarantee letter or instructions regarding Salvage Security
- General Average Adjustment Statement
Example
For example, suppose a container ship runs aground and the shipping company issues a General Average Declaration. Subsequently, the General Average Adjuster requests submission of the General Average Bond, Cargo Value Declaration, invoice, and the insurer’s General Average Guarantee.
The shipper had marine cargo insurance, but only submitted documents to the adjuster and did not notify the insurance company. As a result, issuance of the General Average Guarantee was delayed, nearly halting cargo release.
In such cases, the freight forwarder needs to manage document submission to the adjuster and the request for General Average Guarantee issuance from the insurance company separately. Additionally, if the cargo is water damaged, surveyor arrangements should be made, and the Survey Report could affect general average adjustment and insurance handling.
Furthermore, if the General Average Adjustment Statement is issued years later, the shipper, insurance company, and freight forwarder must review the contents and organize contribution shares, General Average Guarantees, deposits, and possible recoveries.
Precautions
The General Average Adjuster is a specialist who organizes the general average and calculates the contribution amounts, but does not act as the shipper’s agent. It is important for the shipper and freight forwarder to submit the required documents according to the adjuster’s instructions while coordinating and confirming details with their insurance company and specialists from their own standpoint.
It is also important not to confuse the roles of the General Average Adjuster and the surveyor. The surveyor investigates the damage status, while the adjuster organizes the general average contributions using those materials.
General average adjustment can be prolonged. Do not assume procedures are complete at cargo delivery; continuous management is required until receipt of the General Average Adjustment Statement, confirmation with the insurance company, and final settlement of contributions and deposits.
Summary
The General Average Adjuster is a specialist who, when general average is declared, organizes the acceptable costs and sacrifices recognized as general average and calculates contribution amounts based on the values of the vessel, cargo, freight, and other relevant interests.
The adjuster reviews the General Average Declaration, General Average Bond, Cargo Value Declaration, General Average Guarantee, cargo damage materials, and Survey Report, and prepares the final General Average Adjustment Statement.
In practice, it is important to remember that the adjuster is not the shipper’s agent, that the adjuster’s role differs from that of the surveyor, and that responses to the adjuster and the insurance company should proceed in parallel. Freight forwarders and NVOCCs need to separately manage document handling for cargo release and subsequent adjustment processes.
