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International Management > 9 Exporting And Importing > Flashcards

9 Exporting And Importing Flashcards

1
Q

Incoterms and what happened to the in 2010

A

Establish world standard norms regarding obligation to sellers and buyers in intl transactions -> convention about what price means
2010: divided into 2 groups, according to means of transport/delivery of merchandise

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2
Q

Maritime transportation incoterms (4)

A

FAS - free alongside ship
FOB - free on board
CFR - cost and freight
CIF - cost, insurance & freight

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3
Q

FAS

A

Free alongside ship - sell when at port of origin

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4
Q

FOB

A

Free on board - sell when placed on ship (responsible for everything beforehand), risk transferred to buyer when loaded on ship
BUYER PAYS FOR SHIPPING

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5
Q

CFR

A

Cost and freight - corresponds to FOB (sell on ship), risk transferred to buyer when loaded on ship, but:
SELLER PAYS SHIPPING

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6
Q

CIF

A

Cost, Insurance and freight - corresponds to CFR but seller covers insurance of shipment, buyer covers unloading coasts

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7
Q

Incoterms for any means of transport

A

EXW - ex works
FCA - Free Carrier
CPT - Carriage paid to
CIP - Carriage and Insurance paid to
DAT - delivered at terminal
DAP - delivered at place
DDP - delivered duty paid

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8
Q

EXW

A

Ex works - sell at factory (price includes nothing after production)

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9
Q

FCA

A

Free carrier - deliver goods to place of transfer

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10
Q

CPT

A

Carriage paid to - delivers to shipment origin, but dont cover insurance for delivery, load goods onto chosen mode of transport

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11
Q

CIP

A

Carriage and insurance paid to - deliver to shipment origin and take over insurance cost for delivery

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12
Q

DAT

A

Delivered at terminal - deliver to place of destination, unload, buyer must clear goods for import

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13
Q

DAP

A

Delivered at place - deliver to place of destination not unloaded, buyer must unload and clear customs

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14
Q

DDP

A

Delivered duty paid - deliver at destination and pay clear for import, don’t unload
DELIVER TO CUSTOMERS DOORS

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15
Q

Meaning free in incoterms

A

Seller must deliver goods to place of transfer (shipping, airport…) or sellers business location

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16
Q

Is FOB or CIF better for buyer

A

If CIF cheaper than getting insurance and freight independently, then CIF better, otherwise FOB

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17
Q

bill of lading - Export documents

A

Receipt for goods deceivers to carrier for transportation

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18
Q

Certificate of origin - Export documents

A

Indicates products origin

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19
Q

Commercial invoice - Export documents

A

Describes goods, buyer/seller address, delivery and payment terms

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20
Q

Consular invoice - Export documents

A

To monitor imports

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21
Q

EEI (electronic export information) - Export documents

A

Most common export document: exporter declares key element of transaction => involved parties, dates, destination…

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22
Q

Export-packing list - Export documents

A

Attached to outside of package: declares materials inside of each package

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23
Q

Pro forma invoice - Export documents

A

From exporter to importer: selling terms, price, delivery: importer must accept before payment is made

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24
Q

Countertrade

A

Goods/services exchanged for other goods/services rather than just using cash

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25
Q

Classic Barter - Countertrade

A

Products exchanged for products

26
Q

Counter-Purchase - Countertrade

A

Sell product to foreign country promotion to make future purchase of product in that country

27
Q

Compensation arrangements or buy back - Countertrade

A

Supplier of capital/equipment agrees to accept future output generated by investment as future payment

28
Q

Switch trade /swap trading - Countertrade

A

Company sells its obligation of purchasing sth in a foreign country to another company

29
Q

Cash in advance - forms of payment: need to hedge (protect yourself financially)?

A

No need to hedge

30
Q

Consignment - forms of payment (explain and need to hedge)

A

Payment only received for items actually sold
- moderate need to hedge

31
Q

Open account - forms of payment (explain and need to hedge)

A

Complete trust: Payment due at later date than shipping, both can debit or credit anything according to the transactions done
- no hedge

32
Q

Sale with deferred payment - forms of payment (explain + need to hedge)

A

Receive goods now but pay later (30, 45 days),
Any part can debit or credit the other part but requires previous validation from other part (form of hedging)
need to hedge depends on creditor quality and risk associated to foreign location

33
Q

Letter of credit - forms of payment (explain)

A

Most used instrument of hedging against risk of default (=risk of invoice not being paid) - guarantees goods will be delivered and paid
Also finance instrument - associated to it capacity of financing the transaction through banks

34
Q

Bill of ladding

A

Proves that goods are dispatched

35
Q

Letter of credit can be…

A

Confirmed/unconfirmed
Irrevocable/not

36
Q

Offset - forms of countertrade

A

Exporter sells products for cash and helps importer to find opportnuites to earn hard currency for payment

37
Q

Two preferred means of payment in intl trade?

A

Cash and credit

38
Q

What option is there for payment if cash or credit not available

A

Countertrade - inefficient way of doing business (sometimes necessary: non-convertible currencies, lack of reserves, insufficient credit or currency tools)

39
Q

Forms of countertrade

A
  1. barter - product exchange
  2. buyback - future output from investments as payback
  3. offset - help importer get cash
  4. switch/swap trading - sell obligation to purchase sth in country
  5. counter-purchase - promise future purchase in country
40
Q

What does accepting countertrade signal

A
  • sellers good faith/flexibility: gain preferential market access in future
41
Q

Role of private agents

A

Help companies manage international trade (e.g. exporter intermediaries)

42
Q

Export intermediary: two types

A
  • export management company (exclusive representation)
  • export trading company (represents multiplem companies in specific market)
43
Q

Freight forwarders

A

Arranges fastest, cheapest transportation

44
Q

Third party logistics (with example)

A

Integrated transport and logistics service (UPS)

45
Q

Custom brokers

A

Trade consulting

46
Q

International banks

A

Processing trade credit and payment

47
Q

Global marketplace:
- coronavirus has … shift to online

A

Turbocharged

48
Q

Global marketplaces

  • … barriers of entry, operating costs …, price transparencies ….
A

Few, Lower, increased

49
Q

Global marketplaces

  • … barriers of entry, operating costs …, price transparencies ….
A

Few, Lower, increased

50
Q

Global marketplace
- companies such as amazon have access top vast amount of capital, prepared o tolerant … margins for … period in order to win market share

A

Low, long

51
Q

Global marketplace fees are very high, SME may struggle if sales not … enough

A

High

52
Q

SME

A

Small and midsize enterprise

53
Q

Ebay, amazon, alibaba group alll examples for

A

Global market place

54
Q

Four different types of marketplaces

A
  • global, regional, national, local marketplaces
55
Q

What are market places?

A

marketplace is a location or platform where buyers and sellers gather to exchange goods and services

56
Q

Fnac online is what kind of market place

A

Regional marketplace

57
Q

Pingo doce and olx is what kind of marker place

A

National market place

58
Q

Mercado de Leiria is what kind of market place

A

Local market place

59
Q

Debit vs credit

A

Deliver good: debited
Pay good: credited

60
Q

When is LC bullet proof

A
  • confirmed by importer bank
  • irrevocable by exporter bank
61
Q

Letter of credit is guarantee made by banking system: what if not accepted

A

Must make own judgement whether to go ahead

International Management (10 decks)

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