What is cargo salvage and how does it relate to General Average?

• A. Salvage is compensation for successful rescue of cargo or vessel; GA contributions may address salvage costs as part of the voyage’s risk-sharing.
• B. Salvage is a type of insurance premium for goods in transit.
• C. General Average is a salvage method where only the ship pays.
• D. Salvage has no relation to General Average.

Answer: (A)

Cargo salvage is the compensation paid to salvors for successfully rescuing cargo or the vessel from danger. General Average is the principle that when a voyage faces peril and sacrifices are made to save the ship and its cargo, the resulting expenses and losses are shared among all parties with an interest in the voyage. The relation is that salvage costs can be included in a General Average adjustment, since they’re expenditures incurred to preserve the voyage. In that sense, salvage funds go to the salvors for their work, while General Average distributes the associated costs among shipowners and cargo owners who benefited from the saving.