ITT Exercises - Freight Transportation.pdf

C pretty good tyres will sell the goods loaded into

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c) Pretty Good Tyres will sell the goods loaded into the trailer at their dock and deliver to EU rail yard in Ireland, where Gino’s will assume risk for the goods and assume the on-carriage costs. d) Gino’s and Pretty Good Tyres have concluded a deal based on minimum risk for the shipper.
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Answers Terms of Trade Page | 192 2017 Exercise 6.1 (Answer) 1. For a term of trade to be appropriate, what two (2) important issues must be addressed? 1. At what specific point of the transaction does the risk of ownership pass from seller to buyer? 2. At what specific point in time do the responsibilities for payment of freight and other charges pass from seller to buyer? 2. What is the primary responsibility of the freight forwarder when advising their client about Incoterms ® 2010 rules? It is the responsibility to first ascertain the intended meaning of the trade terms used and then, if necessary, have the trade terms replaced by the proper and complete Incoterms ® 2010. 3. When using the FOB term, why should a freight forwarder be thorough in their probing? Establishing if the cargo is ocean or air is the first step, by negotiating a term FOB instead of FCA you are forcing your supplier at origin to pay whatever terminal fees are assessed. Quoting FCA a specific address and including the terminal origin fees is preferable. 4. As a freight forwarder, what should you advise your customer in the event that they are not controlling the freight and the seller/supplier arranges the freight? Remember - freight costs are normally included by the seller in the integrated price of the goods. Freight is never free!! 5. Incoterms ® 2010 influence contracts of carriage, insurance and finance. Are Incoterms ® 2010 effective when dealing with services? No. Incoterms ® 2010 are applied only to tangible goods. 6. Each trade term used in a sales contract should be accompanied by the wording “Incoterms ® 2010” or the relevant version. Why? It is important to note that buyers and sellers may continue to incorporate a previous version of the Incoterms ® rules into a contract of sale, such as DDU Incoterms ® 2000, if they choose and as long as the contract of sale clearly indicates the version.
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Answers Terms of Trade Page | 193 2017 7. What considerations were taken into account by the ICC when revising Incoterms ® 2010? The new rules have been revised to take into account security, electronic communication, insurance and customs free zones, e.g., EU. In addition, the division in the terms is appropriate to the goods and mode of transportation, e.g., rules for any mode or modes of transport and rules for sea and inland waterway transport. 8. Are the Incoterms ® 2010 enforceable through the courts and incorporated into Canadian law? No. They are not an international convention or law, such as the Hague-Visby Rules. The Incoterms ® 2010 are only a set of rules and can be upheld in a court of law only when they are incorporated into a sales contract as the sales contract is governed by law in Canada.
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  • Fall '18
  • Jane Smith
  • freight forwarder, Commercial item transport and distribution, CIFFA, Ocean Transportation Intermediary

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