Module 9: Global Logistics Considerations

Question 1

When a buyer can purchase similar products from different suppliers. Increases the buyer’s power because the buyer doesn’t have to rely on just one supplier.

Answer 1

substitutability

Question 2

The entity responsible for ensuring the imported/exported goods comply with local laws and regulations, for filing the documentation for duty entry, and for paying any associated import duties or taxes.

Answer 2

importer of record

Question 3

Country regulations that penalize organizations that engage in bribery. The OECD Anti-Bribery Convention requires countries to develop such regulations.

Answer 3

anti-bribery regulations

Question 4

A gift, money, or a favor given by one person to another intending to influence the person’s decision, judgment, or conduct. Offering or accepting bribes is illegal in most countries and a violation of the UN Global Compact. A complicating factor is that bribes are expected parts of business transactions in some cultures.

Answer 4

bribes

Question 5

An agreement that allows US customs agents in foreign ports to identify and inspect high-risk containers prior to their being loaded on a ship bound to a US port.

Answer 5

container security initiative

Question 6

An agreement between countries intended to reduce or remove barriers to trade within member countries. Frequently, but not always, those countries are geographically close. Examples […] are the European Economic Community and the North American Free Trade Agreement (NAFTA).

Answer 6

trade bloc

Question 7

Any material that a country’s relevant government agency has classified as a risk to human, animal, or environmental health or to property—either on its own or due to interaction with other elements. A government’s transportation authority may allow transportation only when proper permits and safety precautions are implemented. Similarly, a government may regulate or supervise hazardous material disposal. Categories include explosives, flammable or corrosive liquids or gasses, biohazards, and radioactive materials.

Answer 7

hazardous materials

Question 8

A ban established by a nation’s government that prohibits individuals or organizations from conducting any trade with individuals or organizations from another particular nation.

Answer 8

embargo

Question 9

A bill of lading used in international trade to help ensure exporters are paid and importers receive the promised goods. When they are used for international transport, these include master bills of lading, house bills of lading, intermodal bills of lading, and air waybills.

Answer 9

International Bill of Lading

Question 10

A certificate that attests that the goods were manufactured in the exporter’s country. It is provided and signed by the exporter’s chamber of commerce.

Answer 10

certificate of manufacture

Question 11

Temporary admission granted to goods that are passing through a country rather than being imported into it. The goods can cross several boundaries duty-free and tax-free without customs inspection. Disposable and consumable items are excluded.

Answer 11

carnet

Question 12

A certificate provided by an independent inspection organization attesting to the accuracy of the value and authenticity of the goods as listed on the invoice. The exporter obtains this preshipment certificate in the exporting country.

Answer 12

certificate of inspection

Question 13

A bill of lading for transporting domestic or international freight by air. It specifies the destination and terms of trade agreed upon by the shipper and transportation organization.

Answer 13

air waybill

Question 14

A shipping document used to control shipments of goods for road transport. The document travels with the shipment and serves as a receipt for goods and evidence of the contract of carriage.

Answer 14

road waybill

Question 15

A document received from a governmental agency authorizing a certain quantity of an export to be sent to a given country.

Answer 15

export license

Question 16

A freight document that indicates goods have been received for shipment by rail. The shipper receives a copy as a receipt for acceptance.

Answer 16

rail waybill

Question 17

An export/import document prepared by the shipper before a shipment can be exported and presented to a government authority of the country in which the shipper resides. Specifies details on the goods to be shipped, including their value, weight, and destination.

Answer 17

shipper’s export declaration

Question 18

A certificate that attests that the goods can be legally sold in the country of export. The intent is to prevent defective products from being exported.

Answer 18

certificate of free sale

Question 19

A tax levied by a government on the importation, exportation, or use and consumption of goods.

Answer 19

duty

Question 20

An internationally standardized description of goods that uses a system of numbers to provide increasingly detailed classification and descriptions.

Answer 20

harmonized system classification codes

Question 21

A quote provided by a seller/exporter prior to the delivery of products or services, informing the buyer/importer of the price. This document is submitted to customs for valuation purposes.

Answer 21

pro forma invoice

Question 22

The US International Trade Commission’s mechanism by which international tariffs are standardized. Importers and exporters classify goods moved across international borders using the harmonized system of the country of import. Then based on this classification the [this concept] is used to determine the amount of tariff they must pay.

Answer 22

Harmonized Tariff schedule

Question 23

An official document indicating the names of the seller and buyer, the product being shipped, and its value. The document is provided by the seller.

Answer 23

commercial invoice

Question 24

A document attesting to a shipment’s country of origin.

Answer 24

certificate of origin

Question 25

A certificate, required under some terms of trade, that attests that a particular shipment has insurance coverage. It is provided by the exporter’s insurance company.

Answer 25

certificate of insurance

Question 26

A list showing merchandise packed, a copy of which is sent to the consignee to help verify the shipment. Often used as part of the order picking and processing.

Answer 26

packing list

Question 27

A special invoice used for goods being sent to the importer’s country. The importing country’s consulate provides the stationery. The invoice is written in the language of the importing country and may require a government employee’s signature.

Answer 27

consular invoice

Question 28

An importing country’s government document that provides an importer with the express authorization to import a particular product.

Answer 28

import license

Question 29

A contract between an ocean carrier and a shipper arranging for carriage of freight. It provides evidence of the carrier’s receipt of the cargo and lists the origin and destination ports, rates, quantities, weight, and any special handling requirements. The shipper is responsible for all losses other than for negligence on the part of the ocean carrier.

Answer 29

ocean bill of lading

Question 30

A promissory note that the importer uses to formally acknowledge its debt to the exporter.

Answer 30

bill of exchange payment

Question 31

The portion of a contract of sale that specifies the responsibilities of the seller or exporter and the responsibilities of the buyer or importer, especially the point at which one party’s responsibilities end and the other party’s responsibilities begin (including the point at which title to the goods is transferred). Commonly specified using International Commercial Terms (Incoterms®).

Answer 31

terms of trade

Question 32

A series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law. These terms do not cover property rights.

Answer 32

incoterms

Question 33

Payment by the importer to the exporter before the exporter ships the goods, providing the maximum protection to the exporter and no protection to the importer.

Answer 33

cash in advance payment

Question 34

A method of payment for goods shipped in advance of payment, in which the buyer or importer sends the seller or exporter an invoice requesting payment by a certain date.

Answer 34

open account payment

Question 35

Designated areas within a country that are considered to be outside the country. Material in the zone is not subject to duties and taxes until the material is moved outside the zone for consumption. There is no limit on the time material may remain in the zone. […].

Answer 35

foreign/free trade zone