What Is Alternative Cost?

The replacement fee is a fee paid to save costs that would have been included in the general average. This fee must be paid not only with the consent of both parties, but also must not exceed the cost saved. The purpose of paying this fee is to replace the larger one with a smaller one, and reduce the losses to both parties. For example, during the repair of a ship in a refuge port, the ship owner paid overtime for the repair workers, which shortened the stay time of the ship in the refuge port and reduced a series of costs that should be paid (such as the refuge port fee, ship staff, food expenses). Wait). This overtime pay shall be a substitute cost and shall be included in the general average. ^[1]