Lgst 412: Final Exam 9, 10, 11, 12, 13

Front 1

method of payment for the seller/exporter (lowest risk-highest risk)

Back 1

1) open account/consignment sales
2) documentary collection
3) documentary credit
4) cash in advance

Front 2

d: open account

Back 2

buyer pays seller after the delivery of the goods at some date in the future
most favorable way a seller pays a buyer
buyer bears a lot of risk since its difficult to collection goods abroad

Front 3

when should a seller use open account as a method to receive payment

Back 3

when the buyer has a good reputation or a history of doing business with the seller

Front 4

d: cash in advance

Back 4

most beneficial method of payment for a seller
when the exporter receives cash in advance before the buyer receives the goods

Front 5

d: documentary credit

Back 5

3rd most riskiest method of payment for seller, uses documents to ensure the passage of the title of goods during transport
buyer receives the title of the goods upon arrival of the goods when the buyer pays for the goods
different than collection because a bank guarantees the purchase of the goods through the issuance of a letter of credit

Front 6

d: documentary collection

Back 6

2nd most riskiest method of payment for seller, uses documents to ensure the passage of the title of goods during transport

Front 7

d: consignment sale

Back 7

the most risky method of payment for a seller (in addition to open account)
when a buyer receives the goods, but the seller retains the title until the goods are sold to a third party and the buyer is paid
used most often when shipping to foreign distributors
seller should get insurancee

Front 8

what cost method (cost plus method or marginal cost pricing) is more competitive

Back 8

marginal cost pricing

Front 9

d: cost plus method

Back 9

a method of pricing that adds all the prices of producing and exporting the good together
sets the price at an uncompetitive rate

Front 10

d: marginal cost pricing

Back 10

the additional cost of producing a good should be less than the domestic cost, direct out of pocket expenses are a floor that prices cannot go below

Front 11

when setting prices in foreign countries what do exporters look at

Back 11

per capita income

Front 12

d: pro forma invoice

Back 12

issued by seller to buyer before the goods are shipped, basically a detailed description (internationally should be more detailed than if it was domestic) of whats being sold including what the price is

Front 13

d: drawee

Back 13

buyer

Front 14

d: drawer

Back 14

seller

Front 15

d: bill of exchange (draft)

Back 15

order by the seller to have the buyer pay the seler

Front 16

d: sight drafts

Back 16

seller has to pay the buyer before the shipment of the goods
seller retains title until after shipment
goes with cash against document payment

Front 17

d: time drafts

Back 17

buyer promises to pay seller at some date in the future
goes with document against acceptance payment

Front 18

d: cash against document

Back 18

collections document, buyer signs sight draft and must pay the buyer before shipment

Front 19

d: document against acceptance

Back 19

buyer signs time draft must pay seller at some date in the future

Front 20

d: bill of lading

Back 20

title document that allows for the transfer of title while the goods are being shipped

Front 21

d: commercial invoice

Back 21

bill for the goods provided by the seller, includes basic info, description, payment/delivery info

Front 22

d: consular invoice

Back 22

purchased through the consulate of the country, used to identify and control goods

Front 23

d: certificate of origin

Back 23

purchased through a chamber of commerce
tells the origin of the good

Front 24

d: certificate of inspection

Back 24

specifications of teh goods shipped, normally obtained through an individual organization

Front 25

d: insurance certificate

Back 25

type of insurance and the amount of coverage

Front 26

d: packing slip

Back 26

goes on the outside of the package in a waterproof slip tells the specific details of the goods inside such as weight

Front 27

9 documents normally required in exporting

Back 27

commerical invoice, bill of lading, consular invoice, certificate of origin, certificate of inspection, insurance certificate, shipper's export declaration, export license, packing slip

Front 28

what are the three functions of a bill of lading

Back 28

1) contract between ship owner and shipper
2) transferrable title document
3) evidence that the goods were delivered to the ship

Front 29

d: electronic bill of lading

Back 29

titles can be transferred electronically, the UN's UNCITRAL adopted a law that facilitated this

Front 30

d: electronic data interchange (EDI)

Back 30

system developed in the 80's to allow for the transfer of titles electronically through a private key

Front 31

d: BOLERO

Back 31

electronic data interchange that faciliates the transfer of bills of lading that is easily accessible to everyone involved in shipment process

Front 32

d: on-board bill of lading

Back 32

clearly identifies the ship used for shipment, signed by the captain of the ship, ensures the buyer the good is being shipped

Front 33

d: received-for-shipment bill of lading

Back 33

only for when the goods are received by the buyer

Front 34

d: consignee

Back 34

person to whom the goods are being shipped, as indicated in the bill of lading, the buyer

Front 35

d: straight bill of lading

Back 35

delivery can only be to the consignee of the bill of lading, non negotiable

Front 36

d: order bill of lading

Back 36

can be bought/sold while the goods are in transit, negotiable, used for financing

Front 37

d: clean bill of lading

Back 37

a bill of lading with nothing on it saying that the goods are not damaged, some letters of credit require a bill of lading

Front 38

d: air waybill

Back 38

used for airtransport domestically and internationally
unlike bill of lading doesnt transfer the title of the goods in transit
non negotiable, just a contract for carriage and a receipt for goods
also states the conditions of goods

Front 39

d: trade term

Back 39

in a contract, designates the risk of loss between a buyer or a seller, 3 letter acronym, INCOTERMS 2000 is a list of trade terms issued by the ICC

Front 40

d: risk of loss

Back 40

the actual designation if the buyer/seller bears the loss of the product

Front 41

d: INCOTERMS 2000

Back 41

list of trade terms generated by the ICC

Front 42

d: shipment contract

Back 42

the risk of loss transfers to the buyer when the goods arrival at the spot to which they are transferred onto the carrier

Front 43

d: destination contract

Back 43

the risk of loss transfers to the buyer when the goods arrive at their destination

Front 44

if no trade term designates where the risk of loss is allocated, who bears it?

Back 44

generally, a shipment contract is used, so the buyer bears the risk of loss when the seller brings the goods to port to be shipped

Front 45

what are the e terms of incoterms

Back 45

just ex works (EXW)

Front 46

EXW (ex works)

Back 46

incoterm
risk shifts to buyer when the seller is finished making the goods, most seller friendly, the buyer pays for everything including shipment to disembarkation point

Front 47

what are the incoterms f terms

Back 47

FCA, FAS, FOB
seller pays for transportation to the carrier, buyer pays rest

Front 48

FCA (free carrier)

Back 48

applies to all modes of transport
seller pays for transportation to the point of disembarkment, buyer pays the rest, buyer assumes risk of transport when the seller delivers the goods

Front 49

FAS (free along side ship)

Back 49

sea transport only
buyer assumes risk when the seller delivers the goods alongside the ship
seller only pays for transport to the port of origin

Front 50

FOB (free on board)

Back 50

sea only
buyer assumes risk when the seller puts the items onto a ship
seller pays only for transport to the point of origin and placing the goods on the ship

Front 51

CFR (cost and freight)

Back 51

liability shifts to buyer at the destination
seller pays for everything until the goods arrive at port of destination
risk of loss transfers to buyer when the goods are loaded onto the ship buyer pays for insurance

Front 52

CIF (cost insurance freight)

Back 52

just sea transport, seller pays for everything including insurance up until the goods reach the port of destination, risk transfers when the carrier receives the goods

Front 53

CPT (carriage paid to)

Back 53

all modes of transport
seller pays for everything until the buyer receives the goods at port of destination, buyer pays insurance
risk transfers when carrier gets goods

Front 54

CIP (carriage and insurance paid to)

Back 54

all modes of transportation, seller pays insurance and all other costs until the buyer receives the goods at the port of destination, risk transfers to buyer when the goods are received at port of origin

Front 55

what do all the d terms have in common

Back 55

are all destination contracts, the risk of costs shifts to the buyer when the goods reach the port of destination

Front 56

DAF (delivered at frontier)

Back 56

rail/car shipment
risk shifts to buyer at frontier
seller incurs all costs of transport until the goods reach the frontier of a country

Front 57

DES (delivered ex ship)

Back 57

only ocean
seller pays all costs up until the goods arrive at the port of destination, buyer assumes risk when the goods arrive, buyer must pay for the goods to be unloaded

Front 58

DEQ (delivered ex quay)

Back 58

only ocean
seller pays for all costs up until the goods are unloaded at the wharf of the destination, buyer assumes risk and costs when the goods are unloaded

Front 59

DDU (delivery duty unpaid)

Back 59

all modes of transport
seller pays for transport of goods to a destination, the buyer must pay for the goods to be unloaded and assumes risk when the goods arrive at destination port

Front 60

DDP (delivery duty paid)

Back 60

all modes of transport
seller pays for all costs until the goods are at destination and unloaded, buyer assumes risk and cost when all the goods are unloaded

Front 61

d: common carrier

Back 61

a company that contracts with the public for transport of goods or people

Front 62

d: unimodal transport convention

Back 62

conventions that govern each form of transport for common carriers

Front 63

what is the name for the hague rules in the US

Back 63

carriage of goods by sea act

Front 64

what does COGSA stand for

Back 64

carriage of goods by sea act

Front 65

what is the warsaw convention

Back 65

carriage of goods by air

Front 66

d: air waybill

Back 66

incorporates all the rules of the warsaw convention

Front 67

what is the montreal convention

Back 67

amendment for the warsaw convention

Front 68

d: exculpatory clause

Back 68

broad limit of liability in a contract that existed before international conventions

Front 69

what is the harter act

Back 69

1893, the legislation that exsisted in the United states before the hague rules, still applies today for domestic shipping, increases the liability of carriers, purpose was to get rid of broad exculpatory clauses

Front 70

common carrier loses liability

Back 70

didnt provide a sea worthy ship
commission of a material deviation
carrier didnt provide a fair opp for the shipper to declare value above per package limitation

Front 71

d: force majeure clause

Back 71

limits carrier liability to account for acts of god

Front 72

what is the carrier liable for

Back 72

must issue a bill of lading
bill of lading must include basic information and descriptions

Front 73

what are the four measures to determine seaworthiness

Back 73

1) the ship must be appropriate for the type of coverage
2) ship must be properly equipped
3) ship must have a competent crew
4) must properly handle goods

Front 74

d: clause paramount

Back 74

in a bill of lading, says that they follow COGSA

Front 75

d: containerization

Back 75

allos a single container to be attached to multiple modes of transport
happened after hague/hague-vizby rules

Front 76

rules for multimodal transport documents

Back 76

icc
depending on what type of transportation is occurring, a different convention or law applies to each stage of that transportation
carrier has the burden to prove at which stage the damage occurs, if the carrier cant prove at which stage then the shipper is normally favored

Front 77

what is the law of bailment

Back 77

the carrier (bailee) has a special duty to deliver the goods to the buyer

Front 78

how many COGSA exemptions are there for carriers

Back 78

17
(16 + 1 catch all)

Front 79

list COGSA exemptions

Back 79

fire, perils of the sea, act of god, act of war, act of public enemies, arrest or restraint under lega process, quarantine, act or omission of the owner of the goods, strikes, riots, saving or attempting to save life/property at sea, wastage in bulk, insufficiency of packing/marks, latent defects + Q clause

Front 80

what is the q clause

Back 80

COGSA exemption
catch all
burden is on the carrier to prove he was not liable

Front 81

what are the 3 vital functions of a freight forwarder

Back 81

1) arranging for the shipment of goods with carriers
2) acting as a freight consolidator
3) processing required documentation

Front 82

d: forwarder's bill of lading

Back 82

carrier type document, freight forwarder issues, extends liability

Front 83

d: customs broker

Back 83

deal with customs authories and help shippers comply with customs regulation

Front 84

d: multimodal transport operations

Back 84

arrange for all different types of transport, but issue 1 bill to the shipper

Front 85

d: through bill of lading

Back 85

MTO or ocean carrier issues that agrees to ship the items to the final destination

Front 86

d: letter of credit

Back 86

commerical bank gurantee of either payment by the buyer or performance by one of the parties, allows the seller to finance the production and export of the goods