chapter 10 Incoterms and International Logistics and Trade

Question 1

explain what Incoterms stand for and what they mean

Answer 1

international commercial terms (Incoterms.serve as a set of uniform rules for the interpretation of commercial terms. These terms define the costs, risks, and obligations of sellers and buyers in international goods transactions.

Question 2

indicate the seller’s and buyer’s obligations within each of the 11 Incoterms

Answer 2

Group E
Departure
The E-terms: In this instance, the seller
makes the goods available to the buyer
at the seller’s named place of delivery,
which is commonly, but not necessarily
the seller’s place of business.
EXW EX Works
(named place of delivery)
Group F
Main carriage unpaid
The F-terms: These items indicate that
the seller is responsible for delivering the
goods to a carrier named by the buyer.
FCA
FAS
FOB
Free Carrier
(named place of delivery)
Free Alongside Ship
(named port of shipment)
Free On Board
(named port of shipment)
Group C
Main carriage paid
The C-terms: According to these terms,
the seller is responsible for contracting
and paying for carriage, but not for
additional costs or for risk of loss or
damage once the goods have been
shipped.
CFR
CIF
CPT
CIP
Cost and Freight
(named port of destination)
Cost, Insurance and Freight
(named port of destination)
Carriage Paid To
(named port of destination)
Carriage and Insurance Paid to
(named port of destination)
Group D
Arrival
The D-terms: These terms indicate that
the seller is responsible for all costs and
risks associated with transporting the
goods to the destination.
DAT
DAP
DDP
Delivered At Terminal
(named terminal at port or place of
destination)
Delivered At Place
(named place of destination)
Delivered Duty Paid
(named place of destination)

Question 3

name the major steps in international trade

Question 4

identify the major considerations in setting up an international trade lane

Question 5

identify the total time and reliability of a logistics lane

Question 6

understand the issues, including legal ones, which have to be considered in choosing a lane and service provider

Question 7

understand the details to be considered in international trade which could cause problems and/or delays if not complied with

Question 8

discuss the method for using a request for proposal (RFP) to obtain the greatest value to a company for a lane

Question 9

complete a total cost of ownership (TCO) for the lane to show all the costs, including the impact of working capital on the total costs