CIFFA
CIFFA
Cargo Insurance
2. List three instances when it is not advisable or possible to sell to a foreign buyer
on an open account.
3. Explain the process of a documentary collection and list the two important
documents involved.
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Drawer: _______________________________________________________
Drawee: _______________________________________________________
Tenor: ________________________________________________________
it is a ______________________ document.
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Questions International Payments, Part 1
Questions:
i) What kind of documents would you send with the direct bank collection letter?
ii) Complete the direct bank collection form for the ocean shipment in this
assignment, including the bill of exchange.
You have to consider that the ocean carrier should only release the container after the
buyer accepted the bill of exchange presented to him by Barclays.
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Questions International Payments, Part 1
From Drawer (Name and Address) Drawers Ref. No. Tenor Currency & Amount
FIRST MAIL
SECOND MAIL
DOCUMENTS DELIVER AGAINST PAYMENT DELIVER AGAINST ACCEPTANCE HOLD FOR ARRIVAL OF GOODS
PROTEST PROTEST NON-PAYMENT PROTEST NON-ACCEPTANCE DO NOT PROTEST
ALL CHARGES FOR ACCOUNT DRAWER FOR ACCOUNT DRAWEE WAVE CHARGES IF REFUSED BY DRAWEE
INCLUDING EXCHANGE, INCURE NO CABLE EXPENSE COLLECT THE BANK OF NOVA DO NOT WAIVE CHARGES
STAMP, TAXES, ETC. SCOTIA CHARGES OF $23.00 WITHOUT FURTHER INSTRUCTIONS
SPECIAL INSTRUCTIONS
SIGNATURE
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Questions International Payments, Part 1
______________________________ 20 __________
________________________________
________________________________ ______________________________
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Questions International Payments, Part 1
For this air freight shipment you have the option to either use the traditional bank
channel or you suggest a different, possibly a more efficient manner of following
shipper’s C.O.D. instructions, especially considering that it is air freight and time is
of the essence.
Questions:
i) If you use a direct bank collection method, how would you consign the air waybill?
ii) How would you forward the completed direct bank collection letter?
iii) What kind of documents would you send with this direct bank collection letter?
iv) What other option do you think you may have to comply with shipper's instructions
for you to arrange for the C.O.D.? Explain.
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Questions International Payments, Part 1
WE ENCLOSE THE FOLLOWING DRAFT(S) AND/OR DOCUMENTS FOR COLLECTION AND REMITTANCE AFTER FINAL PAYMENT ONLY. PLEASE HANDLE THIS COLLECTION AS IF RECEIVED DIRECTLY
FROM THE ABOVE OFFICE OF THE BANK OF NOVA SCOTIA TO WHOM YOUR ACKNOWLEDGEMENT. ALL REPORTS AND PAYMENT IS TO BE DIRECTED ALWAYS QUOTING THE ABOVE REFERENCE
NUMBER. THIS COLLECTION IS SUBJECT TO THE UNIFORM RULES FOR COLLECTIONS (1995 REVISION) INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 522.
From Drawer (Name and Address) Drawers Ref. No. Tenor Currency & Amount
FIRST MAIL
SECOND MAIL
DOCUMENTS DELIVER AGAINST PAYMENT DELIVER AGAINST ACCEPTANCE HOLD FOR ARRIVAL OF GOODS
PROTEST PROTEST NON-PAYMENT PROTEST NON-ACCEPTANCE DO NOT PROTEST
ALL CHARGES FOR ACCOUNT DRAWER FOR ACCOUNT DRAWEE WAVE CHARGES IF REFUSED BY DRAWEE
INCLUDING EXCHANGE, INCURE NO CABLE EXPENSE COLLECT THE BANK OF NOVA DO NOT WAIVE CHARGES
STAMP, TAXES, ETC. SCOTIA CHARGES OF $23.00 WITHOUT FURTHER INSTRUCTIONS
SPECIAL INSTRUCTIONS
SIGNATURE
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Questions International Payments, Part 1
______________________________ 20 __________
________________________________
________________________________ ______________________________
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Answers International Payments, Part 1
2. List three instances when it is not advisable or possible to sell to a foreign buyer
on an open account.
1. When there are currency restrictions, import permits or quotas or
where open accounts are prohibited.
2. In countries where political instability or economic instability make
it an unreliable way of receiving payment for your goods.
3. When you feel that the buyer will not pay as agreed.
3. Explain the process of documentary collection and list the two important
documents involved.
The exporter engages a bank to do the collecting at destination via a
corresponding bank. All shipping documents and a bill of exchange are
given to the bank who will not release the goods to the importer until they
have collected the commercial invoice amount or obtained an accepted
term bill of exchange.
The two important documents are the bank collection form and the bill of
exchange.
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Answers International Payments, Part 1
between the exporter and the importer. Also, the _exporter _must contract
an
receivables.
it is a _non-negotiable_ document.
15. The _importer__ usually pays the banks’ fees for documentary collections.
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Answers International Payments, Part 1
Question i) You must send, as a minimum, the freight controlling document i.e.,
the bill of lading and a commercial invoice. Additional documents, like
insurance policy or packing list, etc. depend on buyer's specifications.
The bill of lading should be consigned to order.
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Answers International Payments, Part 1
From Drawer (Name and Address) Drawers Ref. No. Tenor Currency & Amount
90 days CAN $150,000.00
United Seed Company Ltd.
125 Portage St., R2V 4G1 Covering shipment of:
Winnipeg, Manitoba, Canada 1 x 20-ft canola seed 15,300 kg
Vessel or Carrier Bill of Lading No.
BILLS OF LADING INVOICES INSURANCE CERTIFICATE PACKING AIR
101
ENCLOSED DRAFTS
CERTIFICATE OF ORIGIN LIST WAYBILL
DOCUMENTS DELIVER AGAINST PAYMENT DELIVER AGAINST ACCEPTANCE HOLD FOR ARRIVAL OF GOODS
PROTEST PROTEST NON-PAYMENT PROTEST NON-ACCEPTANCE DO NOT PROTEST
ALL CHARGES FOR ACCOUNT DRAWER FOR ACCOUNT DRAWEE WAVE CHARGES IF REFUSED BY DRAWEE
INCLUDING EXCHANGE, INCURE NO CABLE EXPENSE COLLECT THE BANK OF NOVA DO NOT WAIVE CHARGES
STAMP, TAXES, ETC. SCOTIA CHARGES OF $23.00 WITHOUT FURTHER INSTRUCTIONS
SPECIAL INSTRUCTIONS
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Answers International Payments, Part 1
Sight
February 4, 2017 c.c. 1152/18572
____One hundred fifty thousand CAD DOLLARS $150,000.00 CAD_________ RECEIVING BANK’S
NUMBER
TO Empire Grain Importers Ltd. United Seed Co. Ltd.
Grangemouth, Scotland
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Answers International Payments, Part 1
1.
Question ii) Since this is an air freight shipment, you cannot, of course, forward
the direct bank collection form separately by mail. The direct bank
collection letter should travel with the shipment in an envelope
attached to the air waybill.
Question iv) Instead of using the bank channel, you could use your agent in Linz
to collect as C.O. D., i.e., a bill of exchange for CAN $31,000.00 made
out to Canadian Manufacturing Inc. Especially for air freight this
would be the more efficient way. You and your agent could collect a
fee - at least the equivalent what both, the Canadian remitting bank
(BNS) and the collect bank (Wiener), would charge.
This method to use your agent is safe in this case when terms of
payment are cash against documents. In case a term is involved you
may prefer the bank channel because you would have to collect first
the signature of acceptance on the bill of exchange and later when the
term is due, present the bill of exchange for payment.
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Answers International Payments, Part 1
From Drawer (Name and Address) Drawers Ref. No. Tenor Currency & Amount
Sight CAN $31,000.00
Canadian Manufacturing Inc. Covering shipment of:
20 Royal York Rd. 1 crate barbeque parts 675 kg
Mississauga, Ont., L5S 2R5, Canada Vessel or Carrier Bill of Lading No.
ENCLOSED DRAFTS BILLS OF LADING INVOICES INSURANCE CERTIFICATE PACKING AIR
CERTIFICATE OF ORIGIN LIST WAYBILL
DOCUMENTS DELIVER AGAINST PAYMENT DELIVER AGAINST ACCEPTANCE HOLD FOR ARRIVAL OF GOODS
PROTEST PROTEST NON-PAYMENT PROTEST NON-ACCEPTANCE DO NOT PROTEST
ALL CHARGES FOR ACCOUNT DRAWER FOR ACCOUNT DRAWEE WAVE CHARGES IF REFUSED BY DRAWEE
INCLUDING EXCHANGE, INCURE NO CABLE EXPENSE COLLECT THE BANK OF NOVA DO NOT WAIVE CHARGES
STAMP, TAXES, ETC. SCOTIA CHARGES OF $23.00 WITHOUT FURTHER INSTRUCTIONS
SPECIAL INSTRUCTIONS
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Answers International Payments, Part 1
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Answers International Payments, Part 1
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Questions International Payments, Part 2
1. What are the main reasons why a letter of credit may be chosen as a form of
International payment?
3. The letter of credit deals with documents and not with goods, what risk does
this pose to the buyer?
4. What kind of risks is the exporter exposed to under the usance letter of credit?
7. Which party draws up and issues the letter of credit and then makes payment
according to the conditions outlined in the letter of credit?
9. Does the advising bank take on any payment obligations to the beneficiary
under a letter of credit?
10. What does the Uniform Customs and Practice for Documentary Credits (UCP)
outline?
11. What is the current version of the UCP rules used by commercial bankers and
commercial parties in the execution of a letter of credit?
12. What is the bank’s responsibility under Article 5 of the UCP 600 rules?
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Questions International Payments, Part 2
13. Is a CIFFA freight forwarder liable for his/her documentation in a letter of credit
transaction?
15. As a CIFFA freight forwarder what is a good way to avoid any lack of attention
or mistakes going through the documentary requirements?
16. The UCP 600 rules provide room for some interpretation; as a CIFFA freight
forwarder what should you do if you are in doubt?
17. What date do the banks look for if the credit prescribes an on board bill of lading
and a latest shipping date?
18. Under the UCP 600 rules, which date do you use to present the documents to
the paying bank?
19. If a bill of lading indicates a place of receipt different from the port of loading,
what should be included in the “on board notation”?
20. Under the UCP 600 rules, Article 23, is a house air waybill acceptable?
21. Unless specified by name in the letter of credit, is a house bill of lading
covered in the UCP 600 rules?
23. As a CIFFA freight forwarder you should guard yourself against the risk of non-
payment. How can you ensure payment from your client?
25. What is the difference between a revocable and irrevocable letter of credit?
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Questions International Payments, Part 2
26. If there are spelling errors in the credit instructions, what should the CIFFA
freight forwarder do?
27. Name some of the most common errors and/or deficiencies in the execution of
a letter of credit.
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Questions International Payments, Part 2
2. Using the diagram below, and the numbers assigned to each step, describe a typical letter of credit procedure.
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Questions International Payments, Part 2
UCP 600
You can find the UCP 600 Articles in the Appendices of the CIFFA Essentials of Freight
Forwarding textbook. You are not expected to memorize the rules, however it is essential
that you familiarize yourself with these Articles, especially Articles 19-24 pertaining to
transport documents. These Articles will be referenced throughout this section. There is
no need for an explanation on how to complete the air waybill for an air freight shipment.
Just observe the requirements of Article 23 in the UCP 600 for an air transport document.
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Questions International Payments, Part 2
a) Complete the air waybill strictly based on the instructions contained in the
letter of credit.
Shipment:
b) Establish the chargeable weight and the air freight payable. Use both
figures in your air waybill. (Refer to conversion tables in Appendix “B”).
c) Special task:
There are two special documentary items in the air freight letter of credit
which you are to discover and then make a comment on how to handle the
items.
Question: which are these two items and what would you propose to do?
General comment: usually shippers expect you to complete and furnish any and
all documents required in a letter of credit.
Normally, you would use a neutral form for the commercial invoice generated by
your computer system or perhaps you still use an overlay system. Generally, there
is no need to use shipper's stationary.
In this activity you are not required to complete the commercial invoice. This
comment is made so you know how to deal with the subject of a commercial
invoice, packing list, etc.
d) Complete the draft in accordance with the instructions of the letter of credit.
Sign the draft.
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Questions International Payments, Part 2
FROM SANWJPJSAXXX
SANWA BK LTD. OSAKA
N/A
OSAKA JAPAN
CIF # 0339388 II UID:
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Questions International Payments, Part 2
42D / DRAWEE:
SANWA BANK LTD.
OSAKA
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Questions International Payments, Part 2
71B / CHARGES:
ALL BANKING CHARGES OUTSIDE OF JAPAN FOR SHIPPERS
ACCOUNT
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Questions International Payments, Part 2
END OF MESSAGE
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Questions International Payments, Part 2
_________________________________________________________________
Copies 1, 2, ands 3 of this Air Waybill are originals and have the same validity.
It is agreed that the goods described herein are accepted in apparent good order and
condition (except as noted) for carriage SUBJECT TO THE CONDITIONS OF CONTRACT
ON THE REVERSE HEREOF. THE SHIPPER’S ATTENTION IS DRAWN TO THE
NOTICE CONCERNING CARRIER’S LIMITATION OF LIABILITY. Shipper may increase
Consignee’s Name and Address Consignee’s Account Number
such limitations of liability by declaring a higher value for carriage and paying a
supplemental charge if required.
To By First Carrier Routing and To By To By Currency CHGS WT/VAL Other Declared Declared
Destination Code Value for Value for
Carriage Customs
$
Airport of Destination Flight/Date For Carrier Use Only Flight/Date Amount of
Insurance INSURANCE – If carrier offers insurance, and such
Insurance is requested in accordance with the
conditions thereof, indicate amount to be insured in
figures in box marked “Amount of Insurance”.
Handling Information:
SCI
No. of Gross kg Rate Class Chargeable Rate/Charge Total Nature and Quantity of Goods
Pieces Weight Weight
RCP Commodity Item No. (incl. Dimensions or Volume)
Valuation Charge
Tax
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Questions International Payments, Part 2
______________________________ 20 __________
________________________________
________________________________ ______________________________
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Questions International Payments, Part 2
For this exercise you are required to deal with a letter of credit (L/C) in an ocean export
shipment. The idea is for you to learn how to recognize and select from a L/C the pertinent
instructions or details you need in order to complete the bill of lading (B/L) and the draft
correctly.
In view of the fact that the draft is made out to the order of the beneficiary, the beneficiary
– i.e., you for the beneficiary – must endorse that draft.
UCP 600
You can find the UCP 600 Articles in the Appendices of the CIFFA Essentials of Freight
Forwarding textbook. It is essential that you familiarize yourself with these Articles,
especially Articles 19-24 pertaining to transport documents. These Articles will be
referenced throughout this section.
Banks will accept the signature of the B/L issuer also for the on board purpose.
This is intended for the novice forwarding student, who attempts to complete a B/L, for a
L/C, the first time. Never forget, however, that for any real-life L/C, you must strictly and
only follow the specific instructions for each particular L/C separately. This guide only
covers those boxes in the B/L for which you must pick up the data and instructions from
the L/C. All other boxes are not relevant in this context. Refer to the B/L at the end of the
guide for the location of the box numbers.
BOX 1: SHIPPER
Insert the name of the beneficiary as shown in the L/C, usually in line 59. Always use the
spelling of the name, address, including the postal code, only as shown in the L/C, even
if it is incorrect or misspelled, and in variance with shipper’s stationery. If there are
variances, regardless how minor, all other documents required under the L/C must be
consistent and show the same version.
When the need arises, put aside the shipper’s stationery and instead use your computer-
generated form or your overlay type form. Both are generic types of forms and the bank
will accept them unless prohibited in the L/C.
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BOX 2: CONSIGNEE
Under the words “Required Documents”, usually in line 46A, a L/C specifies how the B/L
is to be made out. It may say, for example, “to order” or “to order of shipper”. Insert exactly
what the L/C prescribes at line 46A.
BOX 3: NOTIFY
Under the words “Notify ...”, usually in line 46A, the L/C specifies whom to notify, usually
the applicant. Again, you must follow the particular instructions in the L/C. The name
and address of the applicant is in line 50. If an address is incomplete or missing, use only
whatever is provided in line 50. Never insert the word “applicant”. If the L/C doesn’t
contain any notify address, insert buyer’s name or address.
To complete these boxes correctly, you must be strictly guided by the type of B/L required
in the L/C.
Articles 19 to 24 of UCP 600 specify different requirements for the 6 types of transport
documents. The following covers only two types of the B/L.
- Marine/ocean B/L
- Combined transport B/L.
Note that a marine or ocean B/L is prescribed probably in more than 95% of all ocean
L/Cs. You may substitute a forwarder’s transport document when the L/C requires a
marine/ocean or combined transport B/L, etc., provided you complete that forwarder’s
transport document exactly in the same way as the UCP 600 requires you to prepare a
marine/ocean or combined transport B/L, etc. Below you can find, for each of the boxes
4 to 9, a comment for both marine/ocean B/L and a combined transport B/L. It is up to
you to read the L/C and choose the correct option.
BOX 4: PRE-CARRIAGE BY
Marine/Ocean B/L
For a port-to-port (loading port/discharge port) B/L you do not need to complete box 4.
When you have a marine/ocean B/L but the container is delivered not at port but at an
inland container terminal or to the consignee’s door (place of receipt or box 5), complete
box 4 with “truck/rail”.
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Not all B/L forms may use in print the title “combined through transport B/L”, nor is this
required as per Article 19 of UCP 600. Whenever a “combined through transport B/L” is
required, all you need to do is complete box 4 as explained above, plus box 5 and box 9
if need be. Article 19 of the UCP 600 defines a Multimodal Transport Document as
covering at least two different modes of transport. Therefore, you must identify the second
mode of transport, usually “truck/rail”. The vessel is the other mode of transport. You will
notice that boxes 4 and 9 carry an asterisk in the B/L form which is defined at the bottom
of the B/L form: “applicable when document issued as combined through B/L”.
This usually means the inland container terminal (CY) of the carrier, but there are some
possible exceptions required in a L/C, e.g., “Ontario” instead of the actual name of a city.
Marine/Ocean B/L
The name of the place/port etc. specified in a L/C in line 44A saying
“loading/dispatch/taking” in charge from can never be put in box 5. That named place/port
etc. in line 44A, if a marine/ocean B/L is specified, can only be put into box 7 (port of
loading). However, you put in addition to the required name of place or port in box 7, in
box 5 the name of the container terminal (city) at which the container was received. This
is acceptable as per Article 20 of UCP 600 provided shipment is (a) containerized and (b)
covered by one through B/L.
Marine/Ocean B/L
You must show here the named port of line 44A in a L/C.
In fact, before doing anything, you must request a copy of the L/C from the shipper and
then check first if line 44A (and line 44B for discharge port) is in fact a port, and second,
if there is a carrier providing there is actually a service from the required port (of loading)
to the required port (of discharge). If there is a carrier you should check if the rate of that
carrier tallies with your prior quotation, if any.
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In the event you cannot find the required service, you have basically two options.
Option 1
Request amendment through the shipper to match the actual port(s) served.
Option 2
Sometime it may be possible to persuade a carrier to issue you the required B/L for the
L/C even though that B/L then does not correspond to the actual service.
For instance, a carrier may agree to show Montreal in box 7 when vessels sail from
Halifax. You have to investigate this possibility at time of booking with a responsible
person at the agent of the carrier so that you have no let down at time the actual B/Ls are
issued by the carrier.
Marine/Ocean B/L
You must show here the named port of the line 44B in the L/C.
In terms of general explanation, the same detail applies for box 8 as explained for box 7
(port of loading).
It must be clearly understood that the named place in line 44B should be an actual port.
In the event it is an inland destination beyond the discharge port you could not comply
when the L/C requires a marine/ocean B/L. In such a case an amendment is necessary.
Usually you cannot persuade a carrier to show in box 8 a foreign inland place.
Transshipment
This needs a special explanation because the UCP rule in Article 20b, c, is frequently or
easily misunderstood.
First, Article 20b clearly defines transshipment to be from vessel to vessel. Now 20c(ii)
says banks will accept a B/L evidencing a transhipment, even if transshipment is
prohibited in the L/C, provided shipment is covered by a container and is on a through
B/L.
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Questions International Payments, Part 2
Since most shipments are in a container and on a through B/L, Article 20c is commonly
understood or interpreted that you would have no problem in case of a transshipment.
Unfortunately there are frequent problems.
The reason for these frequent problems is the style or format of all B/Ls.
When you have transshipment the carrier on the B/L identifies that transshipment by
completing box 8 with name of transshipment port whereas the port of final destination
you need shows up in box 9. Box 9 is described in all B/L as place of delivery.
But article 20 for a marine/ocean B/L requires that the port of destination shows up in box
8. If you could create a B/L form which describes box 9 as final port of discharge, the
bank would accept your transshipment B/L on the basis of article 20c.
For the great majority of container lines a transshipment takes place on most routes. The
feedering from transshipment port to port of final destination is usually a vessel also
owned/controlled by your carrier. Many carriers do not even bother anymore to identify
a transshipment port in the B/L.
The point is, whenever a L/C prohibits transshipment you have to ensure with the carrier
at time of booking that the carrier will indeed issue you the B/L you require for the L/C.
When a carrier is unwilling to omit the showing of the port of transshipment in the B/L,
there is sometimes another possible solution before requesting an amendment.
Try to persuade the carrier to show the fact of transshipment and the name of the port of
transshipment as a separate line in box 19 whereas you request the carrier to show in
box 8 the port you require in accordance with your L/C.
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Questions International Payments, Part 2
Marine/Ocean B/L
Since line 44B is required to be shown as port in box 8, port of discharge, there is
normally no need to complete box 9 for a marine/ocean B/L. However, if in
spite of the L/C requirement in line 44B the client wishes delivery of the container at an
inland place, you may complete box 9 (place of delivery) in addition to box 8 (port of
discharge).
Insert, in detail, the container number, seal number, container size, and number of
containers, as well as any markings, if the L/C stipulated so.
1) Description
a) You should use strictly the exact description or wording used in the L/C, usually in
line 45A. You must copy the description truly and faithfully with all mistakes, if any.
b) You should include any additional wording seemingly not pertaining to the
description block of line 45A, e.g., “warranted packed in seaworthy cases” or any similar
wordings even when it is obvious to you they are not really part of a description.
You can always insert additional descriptive information, as you are required for
hazardous goods or tariff rating purposes.
The descriptions in the B/L should match the L/C exactly. Note that according to UCP
600, Article 14e, only the commercial invoice must correspond exactly with the L/C. Other
documents may describe the goods in general terms not inconsistent with the description
in the L/C.
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The proviso “not inconsistent with” is really a dangerous phrase because it allows for a
judgmental assessment by the bank. Also, bear in mind that the UCP rules are for the
bank usage toward the documents. Always bear in mind that the journey of the cargo
also involves different authorities, such as customs, insurance company or surveyor that
might delay the shipment process or even reject some documents if the description on all
documents does not match. Therefore, you are well advised to stick rigidly to the L/C
description also for the B/L.
There are two possible occasions when you may wish to make use of the proviso of Article
37C:
Descriptions of excessive length, which do not fit into existing B/L forms without an
attachment sheet. We recommend the use of a RIDER page where you can
include the complete compliant description. Carriers will also issue the same
RIDER page on their stationary paper.
Descriptions, which contain the actual value of the shipment. In such cases some
carriers may wish to assess an ad valorem ocean freight rate. If and when the need
for these two occasions arises and no amendment is possible, you first need to
check with the carrier whether or not a higher ocean freight rate would apply and
you need to check with the bank in advance of booking, perhaps with a sample
B/L form your propose, if the bank accepts your version of the description. A simple
B/L sample may not be enough, you may have to send copies of the other
documents required so the bank can judge if they are consistent with each other.
a) When a L/C uses the word “marked” or words to a similar effect, that is an order
for you to put the relative information in box 12. The full instructions are usually marked
“freight prepaid or collect”. In that case it is not good enough to complete only box 24 in
the B/L simply with the name of your city at origin or use the word “payable at destination”.
b) You also must show all important on board clauses. Carrier B/Ls frequently do not
provide for the required style of on board notation, therefore you have to ask the carrier
to add it in for you.
Marine/Ocean B/L
When it is a pure port-to-port B/L and you only complete box 7 (port of loading) and box
8 (port of discharge) you only need to mark in box 12 “on board (with a date)”. When you
completed in addition to box 7, box 5 (place of receipt), the style of the on board notation
in box 12 must be:
You must repeat the name of the vessel and the name of the loading port even though
both are already shown in box 6 and box 8. The background explanation is in Article 20
a (ii).
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Questions International Payments, Part 2
c) In the event the L/C demands that all documents show, for example, the L/C number,
it is in box 19 where you put it. Sometimes other “number” information is required to be
shown in the L/C, such as order numbers, import permits, customs tariff item, etc. You
must carefully scrutinize each L/C for such additional instructions and follow them
accordingly.
As in all previous B/Ls, insert the shipment gross weight and shipment volume. Always
check to see if there are any stipulations in the L/C regarding shipment weight or volume.
Refer to the Preface of this exercise for the specific format the signature authentication is
required to be acceptable under the UCP 600. Carrier’s B/Ls frequently do not provide
for the specific signature authentication required. Therefore, you have to instruct the
carrier in which exact manner he must authenticate the signature on the B/L.
This refers to the back of the B/L. Whenever a L/C requires that B/L in box 2 is made out
"to order" or "to order of shipper", that shipper must endorse the B/L. You do this by
typing the name of the shipper’s company on the top of the back of the B/L and sign your
name over the shipper's name.
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Questions International Payments, Part 2
Carrier:
Shipper:
BILL of LADING
Carrier References: B/L-No.:
BOX 2 BOX 10
Consignee’s Reference:
Notify Address (Carrier not responsible for failure to notify: see clause 20(1) hereof): Place of Receipt:
BOX 3
Place of Delivery:
Pre-Carriage by: BOX 4 Place of Receipt by Pre-Carrier: BOX 5
Ocean Vessel: BOX 6 Port of Loading: BOX 7
Port of Discharge: BOX 8 Place of Delivery by On-Carrier: BOX 9
Container Nos., Seal Nos., Marks and Nos. Number and Kind of Packages; Description of Goods Gross Weight (kg) Measurement (cbm)
Above Particulars as declared by Shipper. Without responsibility or warranty as to correctness by carrier (see clause 11(1) and 11(2)
Total No. of Containers/Packages received by Shipper’s declared value (see clause 7(1) and 7(2) Received by the Carrier from the Shipper in apparent good order and condition
the Carrier: hereof): (unless otherwise noted herein) the total number or quantity of containers or other
packages or units indicated in the box opposite entitled Total No. Of
Movement Currency
Containers/Packages received by the Carrier” for Carriage subject to all the terms and
conditions hereof (including the Terms and Conditions of the Reverse hereof and the
Terms and Conditions of the Carrier’s Applicable Tariff) from the Place of Receipt of
Charge Rate Basis WT/MEA/VAL Payment Amount the Port of Loading, whichever is applicable, to the Port of Discharge or the Place of
Delivery, whichever is applicable. One original Bill of Lading, duly endorsed, must be
surrendered by the Merchant to the Carrier in exchange for the Goods or a delivery
order. In accepting the Bill of Lading the Merchant expressly accepts and agrees to
all its terms and conditions whether printed, stamped or written or otherwise
incorporated, notwithstanding the non-signing of the Bill of Lading by the Merchant.
In Witness whereof the number of original Bills of Lading Stated below all of this tenor
and date has been signed, one of which being accomplished the others to stand void.
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GENERAL OBSERVATIONS
In most cases, it does not help at all to question the bank for explanation. Always keep in
mind that a bank is not experienced in any shipping matter at all. All the bank can do, and
is required to do under the UCP, Article 5, is to judge if all documents submitted appear
to be in accordance with the terms of the L/C. In fact, you may alert the bank to a problem.
Never forget that it is the bank’s money which is riding directly on their judgement of your
documents being L/C compliant, therefore the bank is bound to be conservative. Their
guidance is strictly the UCP 600. Whenever problems regarding compliance arise,
consult your experienced manager in your forwarding organization. If no solution seems
possible, your shipper must request an amendment. Amendments delay shipping, are
costly for your shipper and annoy buyers. Only ask shippers to request an amendment if
there is truly no other choice.
Questions to the advising bank should only pertain to an item on which it is possible for
the bank to make a clear decision. When preparing documents for a L/C, always insist to
do this by reading from the actual original L/C. Faxing or photocopying of L/Cs can cause
“errors” in spelling. You must insist, in the interest of the shipper, that shipper is furnishing
you the original or, if need be, you should insist to retrieve the original from the advising
bank holding the original copy of the L/C.
It is all right, however, to use a fax or photocopy of a L/C for consulting purposes.
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a) Complete the ocean bill of lading strictly based on the instructions contained
in the letter of credit (see next 3 pages).
Shipment:
Maersk will transship in Singapore, but Maersk usually makes no reference of the fact of
transshipment in their bills of lading issued.
b) Check first if this shipment fits into a container and if it does, state size of
container required. Make up a container serial number and a seal number
to be used in the bill of lading.
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BANK OF MONTREAL
TORONTO, CANADA
RECEIVED 1/69417
SRN 13NBNZNZ22AXXX47388
SENT 1/5/12
FROM NBNZNZ22AXXX
NATL BNK OF NEW ZEALAND, H.O. +AOS
POB 1791
WELLINGTON NEW ZEALAND
CIF# 0049817 II UID:
MT 700 ISSUE OF DOC CREDIT PRIORITY 01
27 / SEQUENCE OF TOTAL
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Req by: TOR AUTOLCT In: AUT PRT 1/5/17 07:29 Page 2
ICN: CA 910212-025712-000 Que: CA TOR LCT ADMR Pri: 200 Dup: N
50 / APPLICANT
AUTOMOTIVE SPARES N.C. LTD
PO BOX 4711
NEW PLYMOUTH
NEW ZEALAND
59 / BENEFICIARY
CANADIAN CAR CARE PRODUCTS LTD.
100 RAILROAD ST.
MISSISSAUGA, ONTARIO
CANADA
42D / DRAWEE:
THE NATIONAL BANK OF
NEW ZEALAND LIMITED
INTERNATIONAL BRANCH WELLINGTON
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71B / CHARGES:
ALL CHARGES OUTSIDE NEW ZEALAND FOR ACCOUNT OF
BENEFICIARY (INCLUDING ADVISING COMMISSION,
ACCEPTANCE COMMISSION AND DISCOUNT CHARGES FOR
TERM CREDITS.
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Carrier:
BILL of LADING
Multimodal Transport or Port to Port Shipment
Shipper: Carrier References: B/L-No.:
Export References:
Consignee’s Reference:
Notify Address (Carrier not responsible for failure to notify: see clause 20(1) hereof): Place of Receipt:
Container Nos., Seal Nos., Marks and Nos. Number and Kind of Packages; Description of Goods Gross Weight Measurement (cbm)
(kg)
Above Particulars as declared by Shipper. Without responsibility or warranty as to correctness by carrier (see clause 11(1) and 11(2)
Total No. of Containers/Packages received Shipper’s declared value (see clause 7(1) Received by the Carrier from the Shipper in apparent good order and condition
by the Carrier: and 7(2) hereof): (unless otherwise noted herein) the total number or quantity of containers or
other packages or units indicated in the box opposite entitled Total No. Of
Movement Currency Containers/Packages received by the Carrier” for Carriage subject to all the
terms and conditions hereof (including the Terms and Conditions of the
Reverse hereof and the Terms and Conditions of the Carrier’s Applicable
Tariff) from the Place of Receipt of the Port of Loading, whichever is applicable,
to the Port of Discharge or the Place of Delivery, whichever is applicable. One
Charge Rate Basis WT/MEA/VAL Payment Amount original Bill of Lading, duly endorsed, must be surrendered by the Merchant to
the Carrier in exchange for the Goods or a delivery order. In accepting the Bill
of Lading the Merchant expressly accepts and agrees to all its terms and
conditions whether printed, stamped or written or otherwise incorporated,
notwithstanding the non-signing of the Bill of Lading by the Merchant.
In Witness whereof the number of original Bills of Lading Stated below all of
this tenor and date has been signed, one of which being accomplished the
others to stand void.
Total Freight Prepaid Total Freight Collect Total Freight Signature by Carrier or Agent
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______________________________ 20 __________
________________________________
________________________________ ______________________________
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3. The letter of credit deals with documents and not with goods, what risk does
this pose to the buyer?
The risk of the exporter not shipping the goods as mentioned in the letter
of credit still persists.
4. What kind of risks is the exporter exposed to under the usance letter of credit?
The commercial risk of the issuing bank, political risk of the issuing
bank’s country and foreign exchange risk.
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7. Which party draws up and issues the letter of credit and then makes payment
according to the conditions outlined in the letter of credit?
The issuing bank.
9. Does the advising bank take on any payment obligations to the beneficiary
under a letter of credit?
No.
10. What does the Uniform Customs and Practice for Documentary Credits (UCP)
outline?
A set of rules on the issuance and use of letters of credit.
11. What is the current version of the UCP rules used by commercial bankers and
commercial parties in the execution of a letter of credit?
UCP 600.
12. What is the bank’s responsibility under Article 5 of the UCP 600 rules?
13. Is a CIFFA freight forwarder liable for his/her documentation in a letter of credit
transaction?
The exporter will not get paid, the exporter depends on you to prepare at
least the transport document without any fault.
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15. As a CIFFA freight forwarder, what is a good way to avoid any lack of attention
or mistakes going through the documentary requirements?
16. The UCP 600 rules provide room for some interpretation. As a CIFFA freight
forwarder, what should you do if you are in doubt?
17. What date do the banks look for if the credit prescribes an on board bill of lading
and a latest shipping date?
The actual on board or sailing date.
18. Under the UCP 600 rules, which date do you use to present the documents to
the paying bank?
19. If a bill of lading indicates a place of receipt different from the port of loading,
what should be included in the “on board notation”?
The on board notation must include the name of the vessel, the voyage
number and the port of loading.
20. Under the UCP 600 rules, Article 23, is a house air waybill acceptable?
No. The house air waybill is not acceptable because it is not a carrier
document
21. Unless specified by name in the letter of credit, is a house bill of lading
covered in the UCP 600 rules?
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23. As a CIFFA freight forwarder you should guard yourself against the risk of non-
payment. How can you ensure payment from your client?
25. What is the difference between a revocable and irrevocable letter of credit?
26. If there are spelling errors in the credit instructions, what should the CIFFA
freight forwarder do?
27. Name some of the most common errors and/or deficiencies in the execution of
a letter of credit.
Presentation after the expiry date, late bill of lading on board date,
description differs, documents missing, consignee information incorrect
and original credit missing.
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3. The issuing bank transmits the credit to the exporter through a bank (the
advising bank) in the exporting country. The issuing bank might ask the
advising bank to add its confirmation to the credit (the confirming bank). At
the time of acceptance of the letter of credit the exporter becomes the
beneficiary.
4. The advising bank informs the beneficiary of the details of the letter of credit,
who carefully checks the letter of credit for its requirements. The advising
bank informs the issuing bank of the acceptance of the letter of credit by the
beneficiary.
5. The beneficiary prepares the required documents and the shipment as called
for in the credit and ships the goods to the importer.
7. The negotiating bank confirms that the documents fulfil the terms of the letter
of credit, and if satisfactory, according to the terms, pays, accepts or
negotiates payment.
9. The issuing bank confirms the fulfilment of the letter of credit, transfers the
title to the applicant and makes reimbursement to the advising bank according
to the terms of the credit.
10. The issuing bank debits or secures payment from the applicant in the manner
agreed to prior to issuance of the letter of credit.
11. The issuing bank releases the documents to the applicant. The applicant uses
the documents to take delivery of the goods.
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It is agreed that the goods described herein are accepted in apparent good order and
condition (except as noted) for carriage SUBJECT TO THE CONDITIONS OF CONTRACT
ON THE REVERSE HEREOF. THE SHIPPER’S ATTENTION IS DRAWN TO THE
NOTICE CONCERNING CARRIER’S LIMITATION OF LIABILITY. Shipper may increase
Consignee’s Name and Address Consignee’s Account Number
such limitations of liability by declaring a higher value for carriage and paying a
supplemental charge if required.
Sanwa Bank Ltd.
Matsubara Br.
Osaka, Japan
Issuing Carrier’s Agent Name and City Accounting Information
CIFFA Forwarder
Toronto, Canada
Agent’s IATA Code Account No.
TORONTO AIRPORT
To By First Carrier Routing and To By To By Currency CHGS WT/VAL Other Declared Declared
Destination Code Value for Value for
Carriage Customs
OSA Air Canada CAD X X NVD $ NCV
Airport of Destination Flight/Date For Carrier Use Only Flight/Date Amount of
Insurance INSURANCE – If carrier offers insurance, and such
Osaka Intl. Insurance is requested in accordance with the
NIL conditions thereof, indicate amount to be insured in
Airport figures in box marked “Amount of Insurance”.
Handling Information:
Notify: the applicant, Yamamoto Barbeque Corp, Osaka and Kintetsu Express.
SCI
Attached:
No. of Gross kg Rate Class Chargeable Rate/Charge Total Nature and Quantity of Goods
Pieces Weight Weight
RCP Commodity Item No. (incl. Dimensions or Volume)
3,760.00
Valuation Charge
Tax
Total Other Charges Due Shipper certifies that the particulars on the face hereof are correct and that insofar as
Agent any part of the consignment contains dangerous goods, such part is properly
described by name and is in proper condition for carriage by air according to the
Total Other Charges Due applicable Dangerous Goods Regulations.
Carrier
CIFFA Forwarder Signature
Signature of Shipper or his Agent
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b) Chargeable weight:
d)
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In Witness whereof the number of original Bills of Lading Stated below all of
this tenor and date has been signed, one of which being accomplished the
others to stand void.
Place and Date of Issue:
Toronto, Canada, February 6, 2017
Freight Payable at: Number of original Bs/l:
Destination 3
Total Freight Prepaid Total Freight Collect Total Freight Signature by Carrier or Agent
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b) Container stowage:
Pallet dimensions: 48 in L x 42 in W x 42 in H
Container: 232 L x 90 W x 90 H
Pallet: 48 42 42
= 4x2x2
= 16
Therefore, we can load 16 pallets into the 20-ft container. Since we only have
15 pallets, thus a 20-ft standard container is adequate.
________________________________ Exporter’s/Beneficiary’s
Signature
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APPENDIX ‘A’
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Note: The Bank will issue the Credit by Canadian Imperial Bank of Commerce,
Hong Kong Branch, if the Beneficiary is located in Hong Kong.
2. Expiry Date - indicate the last date on which drafts and/or documents may be
negotiated (usually, but not always in the country of the Beneficiary.) This date will
usually be a few days after the last date on which shipment may be made. The
extra few days allow the Beneficiary time to prepare and assemble the required
documents.
3. Applicant - indicate name, address and fax number (usually the importer).
Note: the Bank reserves the right to advise the documentary credit directly to the
Beneficiary through an Advising Bank of its choice. If it is imperative that the Credit
be relayed through the Beneficiary's bank, this should be noted in box 17 -
Additional Conditions.
5. Currency and Amount - indicate the full name of the currency. If the amount of
the Credit can be exceeded or reduced, indicate by what percentage.
6. Draft Requirements - indicate the term of draft(s), if required. (e.g. Sight, 60 days,
90 days, etc.). Note that the term of draft(s) has no bearing on the expiry date of
the Credit. Indicate if draft(s) are not required.
7. Partial Shipment(s) - place an "x" in the appropriate box. If left blank, partial
shipments will be prohibited.
Transhipment - place an "x" in the appropriate box. If left blank, transhipments will be
prohibited. Refer to current UCP which outlines the conditions under which banks
will accept documents indicating that transhipment may take
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8. place even though transhipment may be prohibited under the terms of the
Credit.
10. Covering - insert brief description of the commodity to be shipped (do not include
lengthy descriptions and details or attachments). If necessary, insert contract,
sales or order number(s) indicating whether they are the Applicant's numbers or
those of the Beneficiary. Details such as grades, quantity, base price, etc. should
be omitted.
For port to port shipments - use only FAS (named port of shipment), FOB
(named port of shipment), CFR (named port of destination), CIF (named port of
destination), DES (named port of destination) and DEQ (named port of destination)
For Multimodal or all other modes of transport - use EXW (named place), FCA
(named place), CIP (named place of destination), CPT (named place of
destination), DAF (named place), DDU (named place of destination) and DDP
(named place of destination). Wherever possible include the specific version of
Incoterms (e.g. Incoterms 2000) referenced in the Sales Contract. Examples of
complete Incoterms are "CPT Toronto Incoterms 2000"or "FOB Hong Kong
Incoterms 2000".
Documents Required
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14. Transport Documents - indicate number of copies and type - "Marine Bills of
Lading (for port to port shipment only)", "Multimodal (Combined) Transport Bills of
Lading, Air Waybill", "Railway Bill of Lading", "Truck Bill of Lading". Note that a
"Forwarder's Cargo Receipt" is not a transport document under UCP.
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15. stipulated, insurance coverage must be for at least 110% of the CIF or CIP
value of the goods (Refer to current UCP).
16. Other documents - indicate any other documents that may be required including
the number of copies of each and content.
Note: In the absence of your instructions to the contrary, the Credit will be issued
instructing the negotiating bank to forward all documentation to CIBC in one
mailing.
19. Period for Presentation - under UCP, unless stipulated otherwise, banks will
accept documents up to 21 days after the date of shipment or until expiry date
(whichever is earlier) regardless of length of transport. The length of the voyage
should be considered when determining this figure.
http://www.cibc.com/ca/trade-finance-int/letters-credit/instr-compl-ltr-crd-appl.html
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APPENDIX “B”
CONVERSION TABLES
Examples:
Examples:
- To convert cubic feet (ft3) to cubic inches (in3), the Conversion Factor is x 1,728
120 ft3 x 1,728 = 207,360 in3
- To convert cubic metres (m 3) to cubic feet (ft3), the Conversion Factor is x 35.3147
50 m3 x 35.3147 = 1,765.735 ft3
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To METRIC
POUNDS SHORT TONS LONG TONS KILOGRAMS
TONS
(lb) (sh tn) (tn) (kg)
From (mt)
POUNDS
N/A ÷ 2,000 ÷ 2,240 ÷ 2.2046 ÷ 2,204.622
(lb)
SHORT TONS
x 2,000 N/A ÷ 1.12 x 907.1848 ÷ x 1.1023
(sh tn)
LONG TONS
x 2,240 x 1.12 N/A x 1,016.0470 ÷ 0.9842
(tn)
KILOGRAMS
x 2.2046 ÷ 907.1848 ÷ 1,016.047 N/A ÷ 1,000
(kg)
METRIC TONS
x 2,204.622 x 1.1023 x 0.9842 x 1,000 N/A
(mt)
Examples:
- To convert metric tons (mt) to short tons (sh tn), the Conversion Factor is x 1.1023
500 metric tons x 1.1023 = 551.15 short tons
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4. What is the main problem with using wood packaging when shipping items
internationally?
5. Canadian warehouses operate under the laws of bailment. This means the
warehouse operator is ……..
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3. What are two standard sizes of pallets for ocean freight shipments?
4. What details do you have to verify prior to stuffing an ocean container and an
airfreight container?
5. What points do you have to remember when loading an ocean and air freight
container?
10. What are the advantages and disadvantages of using a private warehouse?
12. Describe a warehouse receipt and explain the difference between negotiable
and non-negotiable receipt.
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However, there is one aspect of export crating you should be able to deal with regularly.
That is the matter of how to figure out on paper if and how a specific cargo quantity can
be stowed best into a container of which size and type.
Many of the cargo samples referred to in this assignment have already been dealt with in
the International Transportation and Trade Program, under Ocean Freight. Consider this
therefore a refresher. There is nothing better than to strengthen your confidence and
expertise in the subject of container stowage calculation.
First, when planning a container stowage, you need to be careful and conservative when
considering inside dimensions, i.e., use the smallest of the range of each of the
dimensions. Remember that the door height of a container is a little less (about 2 inches)
than the inner height of a container.
When it comes to open-top containers and the loading of big pieces, never guess.
Consult the carrier’s individual container specifications to see if a "fit" is feasible.
Remember, you only find the actual inside dimensions of any container when the box is
sitting at the warehouse ramp of your client.
Check the specifications for the details of an open-top container and notice that due to
the different special shape of an open top container, the available inside dimensions for
length, width and height as well as door height/width are less than for a standard
container.
Now to the “fitting” or container stowage calculation or method itself: If you feel the need
to make little sketches to help, you do so. A container loading plan will assist the people
who are loading the container. Make sure to be accurate, and try to make the sketches
to scale.
To determine the container requirements, first, estimate, and then calculate to see how
the cargo will actually fit. This is where sketching or drawing a stowage plan becomes
helpful.
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It is always advisable to write at top of your working sheet the inside dimensions and size
of the container type you intend to use. For example:
When you do use the exact carrier container dimensions, you should never bother with
fractional inside container dimensions, round down to the nearest full number in inches
or centimetres. Similarly, it is wiser not to use fractional inches/cm of cargo but round as
appropriate, usually up.
Additionally, keep in mind the cargo weight. Examine the weight loaded per container
and decide if your loaded weight is within the prescribed payload of a 20-ft or 40-ft
container. In addition to payload permitted for the container itself you must check and
decide if the weight you loaded is within the limits of road regulation, i.e., road regulation
in Canada, any transit country like the U.S., or country of destination. 48,000 lb is not a
problem in Canada if shipped by rail or road. It is not a problem via a U.S. state directly
to U.S. port of loading, if by rail. It can be a problem if shipped by road through some
U.S. states (each state is different). New York State has especially low road limits. You
should also review permitted weights in the country of destination. For some destinations,
the rate for container delivery is dependent on the gross weight of the loaded container.
One word of caution: You should never fool around with the height of a cargo unit by
thinking you can put a package on its side. The only possible exception to this rule would
be if, from the contents of the cargo unit, it is obvious that there would be no problem.
Turning cargo on its side should only be considered if shipper is willing to give you written
instructions.
It is suggested you make up your other samples of uniform packages to train and test
your skills to calculate correct container stowage.
Stowage of Automobiles
Cars must be braced and secured inside the container. This work should only be done
by people with the proper professional expertise.
You should never consider mixing other cargo with cars inside a container. If you do,
there is always the risk that the cargo portion will move around during the voyage and
damage the cars.
If mixing is ever contemplated, one needs to build a wooden wall or bulkhead behind the
second car and perhaps even a deck on top of the cars. The space left in length after
two cars are loaded is usually too small to warrant the cost of building a bulkhead and
building a deck over the cars is even more risky. There is the potential for unusual stress
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through violent container/ship movements on the high seas so that such a deck, even if
well built, can cave in. Because of that you should compare a container not to a truck,
but perhaps to a roller coaster ride. Therefore do not contemplate mixing cars with other
commodities.
There is one possible exception to this non-mixing rule. This refers to household goods,
when the owner, in view of cost, may insist on such mixing, in spite of your technical
explanation. It would be a matter of company policy for each forwarder to decide how to
proceed with such a mix, provided the building of the bulkhead and the stowing of the
goods into such containers is strictly done by well-known reputable specialists in this field,
such as a moving firm. Please take note that a letter of instruction by the HHG owner is
of little value or protection for you if something goes wrong. Courts usually protect the
small guy. Your best safeguard is, as it is always, first class quality work.
The calculation of stowage for cars is really no different than that for palletized cargo,
except that you only need to consider the length of the vehicle. Given the length of these
particular pick-up trucks and the following container dimensions, how many containers
would you need?
In this case you do not have the single dimensions of each carton. You must make a
reasonable guess what volume in terms of m3 likely fits into one container and which size
of container is expected to be the most suitable. The type of commodity usually gives
you an idea. You should be aware of the fact that dense items would be in a relatively
small-sized cartons and pretty heavy or dense in relation to their volume. In other words,
dense items will stow well, making good use of inside container space.
Items that are un-palletized make for better use of inside container space. Using the
stated average inside container dimensions, make your estimate of how many m 3 of items
would fit into what size of container. Also, which container size is the correct one to
choose and how many containers you need.
In reality, you should however insist with your shipper to supply you with actual single
dimensions of cartons or whatever unit of cargo. You should normally refrain from making
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such estimates. When asking you to do this here, it is strictly a theoretical exercise to
sharpen your skills.
Example: Books
Therefore, we would need 2 x 40-ft standard containers to move the total shipment of
books.
The main point here is for you to recognize that there is a problem with both, weight and
dimensions. You know from your container specifications that all containers are only 8 ft
wide outside. Therefore, the inside width of all containers is less than 8 ft. Open-top
containers have an even less available width inside compared to a standard container.
There is a similar situation for the height. The standard outside height of containers is 8
ft 6 in, but after allowing for thickness of floor and roof, you have always less than 8 ft
inside height. Again, a special situation applies for open-top containers, as you may have
no choice but to uncrate a large item for container stowage.
Check your container specifications for inside dimensions of an open-top container, and
compare it to the crated and uncrated item.
Loading Procedure
Technically, you have a problem to load this unit through the door. First, the door is
neither wide, nor high enough. Second, you should realize that no regular forklift can
handle this combination of length and weight. Even if the unit were a little smaller and fit
through the door, you should never contemplate pushing it through the door into the
container. How can the receiver unload such a unit? Such units must be loaded through
the roof opening of the open-top container.
Bracing
It is essential that weight is evenly distributed within the container, i.e., a single heavy unit
must be centred in the container and then braced at both ends to prevent any shifting.
The centering and the woodwork required for bracing may prevent you in this case to load
the reels as well into the same container. For a decision, you should depend on the
expertise and advice of your export crater. If the cargo does not fit into an open-top
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container, you should examine other containers, e.g., flat rack, or possibly ship the cargo
as break bulk, on a conventional vessel.
Remember that there are two kinds of payload restrictions to consider, especially for
extremely heavy and dense equipment such as an industrial mould or die (usually
automotive industry). The standard allowable payload for a container is the maximum
weight you are allowed to load inside a container. This payload is the difference between
the gross weight of a container (container tare weight and load) and the container tare
weight, both of which are marked on the door of any container. This regular payload
assumes that you are spreading the cargo weight evenly over the entire inside length of
the container.
The second type of payload defines a maximum weight per running metre or foot of
container inside length. This maximum weight is usually 4,500 kg/m for a 20-ft container
and 3,000 kg/m for a 40-ft container.
Many steamship agencies may be unaware of this special restriction, nonetheless if you
are involved in a shipping situation in which the cargo does exceed the permitted weight
per metre, you are obliged to report this to your client and propose a suitable alternative.
The first choice should be to build a cradle or frame of heavy timber in order to redistribute
the concentrated weight of a die from its own length to the total length of the floor of the
20-ft container (usually open top).
In the event such redistribution still does not sufficiently reduce the weight of the die below
the indicated maximum per metre or if the work/expertise of building a cradle involving
securing it to the container floor is not available, the remaining alternative means first of
all a crating of that mould or die and shipping as conventional break bulk cargo, either
with a conventional vessel or, if need be, with RO-RO vessel service provided the RO-
RO vessel is equipped with ships trailers or mafi for loading/unloading the RO-RO vessel.
The difference when loading mixed cargo is that you have to use a floor plan control by
adding the different length of the pallets, but stay within container inside length.
Remember that you have to use a second tier of pallets. When the length of pallets in
the bottom tier differs from the length dimensions in the second tier, it is the longer of the
two lengths you must use to arrive at the total length of floor space actually used up.
Another point is that you should make sure that the lightweight pallets of cargo get stowed
on top of the heavier pallets of cargo.
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Questions Export Packaging and Warehousing
Canada is officially metric. Nonetheless, you will still find today that nearly in all cases
involving Canadian export, the traditional shipper will supply you with imperial
dimensions, i.e., feet and inches. In an import situation you probably deal with metric
dimensions, i.e., metres and centimetres.
It is strongly recommended not to convert the dimensions given to you by the client, at
least not for the purpose of a container stowage calculation. Caused by inevitable
rounding after any conversion, your results are likely to be inaccurate.
Since the whole thing is a matter of basic arithmetic, i.e., dividing, it should not make any
difference in which mode you work, even if you personally may feel uncomfortable with
the imperial dimensions or vice versa.
1) If the client has given you the single dimensions of packages in inches, proceed
as follows:
Do not convert each single dimension from inches into centimetres. For the division in
L/W/H, simply stay in the inch mode. For the calculation of a cube, multiply the inches
with each other – the result is in cubic inches, divide the result by 1,728 (1 ft3 = 1,728
in3), divide ft3 by 35.31 (1 m3 = 35.3146 ft3). In other words, you only convert once, i.e.,
the end total. You should memorize the two conversion figures.
2) If the client has given you single metric dimensions of a package, simply select a
conservative metric figure from your carrier’s container specifications for the
container inside dimensions and then proceed in the same style and manner as
explained earlier.
Conclusion
Each case of container stowage planning you work out will have a different set of
dimensions. Always try to achieve maximum use of container dimensions by
interchanging length and width, even within one row if that achieves a better utilization of
space. The first pattern of sizes you choose may not necessarily be the best option
possible. Always double-check yourself by applying a different pattern of case placing.
2017 Page | 80
Questions Export Packaging and Warehousing
It is important for you to learn and understand the basic approach how to proceed
correctly from the start. Any of your working papers must be set up in such a clear and
transparent style that a colleague in your office can continue your file without any problem.
2017 Page | 81
Questions Export Packaging and Warehousing
155 pallets of TV monitors, each pallet weighs 1,200 lb, the dimensions of each
pallet are L48 in x W42 in x H34 in.
How many containers of which size are required for this shipment? Work your
answer out WITHOUT using a drawing. Stay within payload the container’s
payload.
10 Jeep Cherokees, each weighs 2,000 kg, the dimensions of each are L4.2 m
(165 in) x W1.79 m (70 ½ in) x 1.61 m (63 in).
500 cartons of tents, total weight is 12,500 kg, total volume is 100 m3.
2017 Page | 82
Questions Export Packaging and Warehousing
d) What is your comment in respect to the reels for loading with main
unit into the same open-top container?
You are requested to load the following consolidation in Montreal into a container
(all dimensions as LWH)
b) Try to show how you arrived at your answer without making a drawing.
2017 Page | 83
Questions Export Packaging and Warehousing
Label the public warehouse layout in the order that would make this warehouse’s design
truly efficient. Choose your labels from the following list:
2017 Page | 84
Answers Export Packaging and Warehousing
Assembling packages on a pallet base and securing the load to the pallet.
Fibreboard box.
4. What is the main problem with using wood packaging when shipping items
internationally?
Wood packaging may contain pests which are harmful to the importing
country, heat treatment is required (ISPM 15 compliance).
5. Canadian warehouses operate under the laws of bailment. This means the
warehouse operator is liable for damage or loss of goods arising out of his
negligence.
Control
Flexibility
Cost.
2017 Page | 85
Answers Export Packaging and Warehousing
3. What are two standard sizes of North American pallets for ocean freight
shipments?
40 in x 48 in, 40 in x 40 in, 48 in x 48 in.
4. What details do you have to verify prior to stuffing an ocean container and an
airfreight container?
5. What points do you have to remember when loading an ocean and air freight
container?
2017 Page | 86
Answers Export Packaging and Warehousing
10. What are the advantages and disadvantages of using a private warehouse?
Advantages - flexibility in the design, can meet specific needs, over a
period of time it may become less costly than a public warehouse.
12. Describe a warehouse receipt and explain the difference between negotiable
and non-negotiable receipt.
Negotiable receipt - a document of title to the goods. The goods can only
be released upon the surrender of the negotiable receipt, properly
endorsed.
2017 Page | 87
Answers Export Packaging and Warehousing
155 pallets of TV monitors, each pallet weighs 1,200 lb, the dimensions of each
pallet are L48 in x W42 in x H34 in.
How many containers of which size are required for the total shipment? Work
your answer out WITHOUT using a drawing. Stay within the container’s
payload.
Solution:
The first thing we notice is that the length and width add up to 90 in.
Remembering our “concept of 90”, we can calculate how many groups of
4 skids we can load on the floor of a 40- and 20-ft standard containers.
2017 Page | 88
Answers Export Packaging and Warehousing
As we have 155 pallets to ship, we take our 40 pallets and divide that into
the number of pallets we have to ship.
155 : 40 = 3.875
As the result has a decimal place greater than 0.5 we are forced to “go to”
another 40.
2017 Page | 89
Answers Export Packaging and Warehousing
10 Jeep Cherokees, each weighs 2,000 kg, the dimensions of each are L4.2 m
(165 in) x W1.79 m (70 ½ in) x 1.61 m (63 in).
Take the number of Jeeps divided by the number we can load into a 40-ft
standard container and this will give us our container requirements.
500 cartons of tents, total weight is 12,500 kg, total volume is 100 m3.
All the information given is just total volumes and weights. As the cargo
is relatively light we do not have to worry about the weight.
We can easily load all this cargo into 2 x 40-ft standard containers.
NOTE:
2017 Page | 90
Answers Export Packaging and Warehousing
m3. This method might have tempted you to use just 1 x 40-ft HC plus 1 x
20 ft for the 100 m3 of tents. That would have been wrong and potentially
embarrassing.
This question emphasises that in a real life situation you should insist
with your client to supply you with actual carton dimensions if an accurate
or binding stowage calculation is required.
But if you have to make an estimate, the relative estimated size of a carton
would determine your estimate. The smaller the carton, the better the
possibility to use the available space efficiently. If you have cartons of
shoes, or other small sized cartons as you would have in a Far East import
container, you probably can load a 40 ft to between 55 or 60 m3.
The un-crated transformer - the “net unit” can only fit into a 40-ft open-
top container. The crated transformer has a width of 8 ft, which is the
same as the outside width of 8 ft of any 40-ft standard or open-top
container. Therefore, the “gross unit” (crated) cannot fit into a
standard or open-top container.
Loading must only be done through the uncovered top. You cannot
load a unit of such length (30 ft) and weight (10 tons) through the door.
Overhead cranes, either in house or rented, will be required to load this
cargo. There is no forklift around capable of handling that length.
2017 Page | 91
Answers Export Packaging and Warehousing
No!! As explained in answer a), the crated unit width is the same as the
outside width of a container. Further, you should always check the roof
opening with the carrier. The roof opening is generally 92 in wide.
g) What is your comment in respect to the reels for loading with main
unit into the same open-top container?
Each of the two pallet lots has a width that allows stowage/placement side
by side. The heights are such that stacking of cargo can be accomplished
2017 Page | 92
Answers Export Packaging and Warehousing
easily. The only exception is the Toronto crate, which does not allow for
either stowage of other freight beside it or on top of it.
To approach this problem you will gradually sum up the floor length used
in the container as we “load” from the “nose” (front) to the door. You
must remember, when we load cargo on top of other cargo, we do not use
any additional floor length or space.
The floor length used is that of a 20-ft container. We have been able to do
a stowage plan and calculation without the need of a drawing.
Fortunately, all the pieces of the puzzle fit well. This is not always the
case in your day-to-day operations. If you feel the need to do a “sketch”,
then please do. It is not important as to how one determines a stowage
plan, it is important that the result of the planning is correct.
2017 Page | 93
Answers Export Packaging and Warehousing
We have also checked that the cargo weight is within the allowable load
for a 20-ft standard container.
It is also advisable to make a chart similar to this when you are doing a
first estimate to see what size of equipment you might need.
2017 Page | 94
Answers Export Packaging and Warehousing
2017 Page | 95
Answers Export Packaging and Warehousing
2017 Page | 96
Questions Commercial Documentation and Regulatory Compliance
2017 Page | 97
Questions Commercial Documentation and Regulatory Compliance
20. Can you apply for an export permit if the exporter is not residing in Canada but
the goods are of Canadian origin and exported through a Canadian port?
21. What international convention regulates the traffic of endangered species?
22. What is CRF?
2017 Page | 98
Questions Commercial Documentation and Regulatory Compliance
Complete the commercial invoice, export declaration, and certificate of origin for the
following shipment.
Shipment details:
Note: if you find that there are minor details missing, just make up a reasonable figure
or date to complete the documents.
Special Note:
You have not been supplied with the HS number for this commodity. You will also not be
supplied with the HS number of the commodity in the following questions. This was
purposely omitted. The reason is that as professional forwarders, we should be able to
use all our resources to accurately complete an export declaration. As you are a
professional forwarder the task is also for you to establish the correct HS number that is
required. (For confirmation on the interpretation of HS codes it is advisable to consult
with your customs team).
2017 Page | 99
Questions Commercial Documentation and Regulatory Compliance
Commercial Invoice
of
5. Consignee Name and Address 6. Other Address (e.g. buyer/bank)
11. Point of Export 12. Pre-carriage By 13. Exporting Carrier and Vessel
30. Other
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page of
1. Business no. 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a
lieu)No d’entreprise 123456789 RM 002
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – N de la prevue de déclaration des douanes
o
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
bureau de sortie
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name – Nom
Area code and tel. no.
Indicatif regional et no de tél.
No. and street – N et rue
o
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
27. I hereby certify that the information given above and on the continuation sheet(s), if any, is true and complete.
Je certife qu les renseignements inscrits ci-dessus et sur les feuilles supplémentairs, s’il en est, son exacts et complets.
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire.
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
Province/État, pays postal Exporter Other
Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél.
Issued in
(country)
3. Means of transport and route (as far as known) 4. For official use
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
____________________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
____________________________
(importing country)
______________________________ ___________________________
Place and date, signature and stamp of certifying authority Place and date, signature of authorised signatory
Complete the commercial invoice, export declaration, and certificate of origin for the
following shipment.
Shipment details:
Commercial Invoice
of
5. Consignee Name and Address 6. Other Address (e.g. buyer/bank)
11. Point of Export 12. Pre-carriage By 13. Exporting Carrier and Vessel
30. Other
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page of
1. Business no. 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
No d’entreprise 667786124 RM 003
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – N de la prevue de déclaration des douanes
o
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
bureau de sortie
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name – Nom
Area code and tel. no.
Indicatif regional et no de tél.
No. and street – N et rue
o
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
27. I hereby certify that the information given above and on the continuation sheet(s), if any, is true and complete.
Je certife qu les renseignements inscrits ci-dessus et sur les feuilles supplémentairs, s’il en est, son exacts et complets.
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire.
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
Province/État, pays postal Exporter Other
Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél.
B13A (4)
Issued in
(country)
3. Means of transport and route (as far as known) 4. For official use
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
____________________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
____________________________
(importing country)
______________________________ ___________________________
Place and date, signature and stamp of certifying authority Place and date, signature of authorised signatory
Complete the commercial invoice, export declaration, and certificate of origin for the
following shipment.
Shipment details:
Commercial Invoice
of
5. Consignee Name and Address 6. Other Address (e.g. buyer/bank)
11. Point of Export 12. Pre-carriage By 13. Exporting Carrier and Vessel
30. Other
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page of
1. Business no. 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
No d’entreprise 987564345 RM 003
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – N de la prevue de déclaration des douanes
o
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
16. Origin - Origine 17. Item description – Description d’article 18. HS Commodity Code- 19. Qty. & unit of 20. Value F.O.B place of
Code de merchandise du measure Qté & exit Valeur f.à.b. bureau de
SH unité de mesure sortie
Country Province
Pays
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
bureau de sortie
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name – Nom
Area code and tel. no.
Indicatif regional et no de tél.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
27. I hereby certify that the information given above and on the continuation sheet(s), if any, is true and complete.
Je certife qu les renseignements inscrits ci-dessus et sur les feuilles supplémentairs, s’il en est, son exacts et complets.
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire.
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
Province/État, pays postal Exporter Other
Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél.
B13A (4)
Issued in
(country)
3. Means of transport and route (as far as known) 4. For official use
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
____________________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
____________________________
(importing country)
______________________________ ___________________________
Place and date, signature and stamp of certifying authority Place and date, signature of authorised signatory
Complete the commercial invoice, export declaration, and certificate of origin for the
following shipment.
Shipment details:
Commodity: umbrellas
Number of cartons: 16, each carton contains 72 umbrellas
Total weight of the shipment: 425 kg
Net weight of the shipment: 400 kg
Dimensions of each carton: 36 in x 18 in x 16 in
Terms of delivery: CPT LHR London, U.K., Incoterms® 2010
Pick-up charges: CAN $100.00
Factory price of the umbrellas: CAN $1,200.00 per carton
Mode of transportation: air freight
Transportation details: British Airways, flight BA642, direct to London
on March 15, 2017
You have sold the freight to your customer at a rate of CAN $2.50/kg.
Commercial Invoice
of
5. Consignee Name and Address 6. Other Address (e.g. buyer/bank)
11. Point of Export 12. Pre-carriage By 13. Exporting Carrier and Vessel
30. Other
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page of
1. Business no. 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
No d’entreprise 234654376 RM 004
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
bureau de sortie
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name – Nom
Area code and tel. no.
Indicatif regional et no de tél.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
27. I hereby certify that the information given above and on the continuation sheet(s), if any, is true and complete.
Je certife qu les renseignements inscrits ci-dessus et sur les feuilles supplémentairs, s’il en est, son exacts et complets.
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire.
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
Province/État, pays postal Exporter Other
Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél.
B13A (4)
Issued in
(country)
3. Means of transport and route (as far as known) 4. For official use
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
____________________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
____________________________
(importing country)
______________________________ ___________________________
Place and date, signature and stamp of certifying authority Place and date, signature of authorised signatory
Complete the commercial invoice, export declaration, and certificate of origin for the
following shipment.
Shipment details:
Commercial Invoice
of
5. Consignee Name and Address 6. Other Address (e.g. buyer/bank)
11. Point of Export 12. Pre-carriage By 13. Exporting Carrier and Vessel
30. Other
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page of
1. Business no. 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
No d’entreprise 556473829 RM 002
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – N de la prevue de déclaration des douanes
o
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
bureau de sortie
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name – Nom
Area code and tel. no.
Indicatif regional et no de tél.
No. and street – N et rue
o
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
27. I hereby certify that the information given above and on the continuation sheet(s), if any, is true and complete.
Je certife qu les renseignements inscrits ci-dessus et sur les feuilles supplémentairs, s’il en est, son exacts et complets.
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire.
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
Province/État, pays postal Exporter Other
Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél.
B13A (4)
Issued in
(country)
3. Means of transport and route (as far as known) 4. For official use
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
____________________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
____________________________
(importing country)
______________________________ ___________________________
Place and date, signature and stamp of certifying authority Place and date, signature of authorised signatory
It should be noted that Canada has various free trade agreements set up with various
countries.
Copies of this form are available by ordering through the Migra’s Canadian Export Guide.
If you are involved in exports you are probably familiar with countries that require a special
certificate of origin.
The Export and Import Controls Bureau (EICB) authorizes, under the discretion of
the Minister of International Trade (Global Affairs Canada) the import and export of
goods restricted by quotas and/or tariffs.
The ACL is a list of countries for which export permits are required to export any
and all goods.
4. Who supplies the blank consular invoice forms, and who certifies them?
1. The exporter/shipper.
2. The forwarder as agent for the shipper/manufacturer.
3. The manufacturer.
4. The shipper’s/manufacturer’s legal representative. (The commissioner for
taking oaths witnesses the signature and stamps it and the Board of Trade or
Chamber of Commerce authenticate it).
6. Give the most important reason why a certificate of origin may be required.
To obtain preferred import status for the merchandise and possibly a lower rate
of duty.
7. Do goods shipped under the NAFTA need a certificate of origin? If so what kind?
Yes, they need a North American Free Trade Agreement (NAFTA) certificate of
origin.
9. When moving exhibition goods to two or more different countries, what document would
you recommend to make import and export procedures easier?
A.T.A. Carnet.
10. A client approaches your company and wants to export a stuffed (taxodermied) bear via
air freight to Hong Kong. What must you do prior to proceeding?
11. Where would you get information on documentary requirements for a given country?
1. It is the document against which the buyer (importer) pays the seller (exporter).
2. It is also the document used to provide information to:
The government of the country of export
The government of the country of transit
The government of the country of import.
As the document used by the buyer (importer) that will assist in the clearance of
goods at the country of destination, it is also the basis for the Canadian Customs
entry and is used to determine duties and taxes so long as it meets certain
requirements.
Weight of shipment
Individual value of pieces along with the quantity of goods and the total value
The currency of the transaction
The terms of payment
The terms of delivery
MOST IMPORTANT - the commercial invoice should be dated and signed.
14. What are the three most common errors made on commercial invoices?
17. Above what value for an export shipment must you issue an export declaration (CAED
or B13A)?
18. What is the function of the B13A? Where or with whom is it filed?
The Harmonized Commodity Description and Coding System (HS) (example below)
forms the basis of the Customs Tariff. The HS was developed and is maintained by
the WCO and it is the standard coding structure and related product descriptions
used in international trade to determine appropriate duty rates, negotiate trade
agreements, maintain trade statistics and identify goods and shipments that pose
risk to the health, safety and security in Canada.
20. Can you apply for an export permit if the exporter is not residing in Canada but the
goods are of Canadian origin and exported through a Canadian port?
Yes, but then the agent acting on behalf of the exporter becomes responsible for
any offences committed respecting the permit.
Commercial Invoice
Nokov Toys Inc.
999 Jane Street
Toronto, ON, L4T 2D4
Scam
Barbina dolls 1,000 Pcs. 10.35 10,350.00
Toys
25 cartons Germany HS#: 9503.90.00.89
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page 1 of 1
1. Business no. No d’entreprise 123456789 RM 002 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom Nokov Toys Inc.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
999 Jane Street Toronto ON, Canada L4T 2D4
4. Consignee information – Renseignements sur le destinaire
Name – Nom Scam Toys
No. and street – No et rue
10 Oden Strasse-12
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
Hamburg Germany 09877
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
Germany
6. Name of exporting carrier, freight forwarder, or consolidator-Nome du transporteur, du
transitaire ou du groupeur de merchandises a exporter Commadore Lines yyyy/mm/dd. time – 24hr, export reporting office code, reference no.
aaaa/mm/jj, heure – 24h, code du bureau de déclaration d’exportation, no de reference
7. Transport document no. – N due document du transport
o
111111111
8. Mode of transport from place of exit – Mode de transport à partier du bureau de sortie
Highway Rail Marine Air
Routier Ferroviaire Maritime Aérien 9(b) Goods inspected by customs – Marchandises inspectées par les douanes
Other (specify) Autre Yes - Qui
(précisez) ________________________________
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
S.S. Louis 2017/01/25
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
25 Cartons Montreal, Canada
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
15. Conveyance identification no. (if applicable) – No d’identification du moyen de transport (s’il y a
lieu)
16. Origin - Origine 17. Item description – Description d’article 18. HS Commodity Code- 19. Qty. & unit of 20. Value F.O.B place of exit Valeur
Code de merchandise du measure Qté & f.à.b. bureau de sortie
SH unité de mesure
Country Province
Pays
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b. bureau
Canadian Dollars 875 kg de sortie 10,800.00
24. Freight charges to place of exit, estimated if unknown (included in field 20) – Frais de transport 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state period – Si
jusqu’au bureau de sortie, estimé si inconnu (compris à la zone 20) les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il s’agit d’une location
$450.00 ou d’un bail, précisez la periode.
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name of person responsible for completion – Nom de la personne responsible de remplir le Company name – Nome de la compagnie
formulaire. Jane Doe CIFFA Forwarder
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
1234 Islington Ave., #706 Toronto Province/État, pays postal Exporter Other
ON, Canada M8X 1Y9 Exportateur Autre
Area code and tel. no. Signature Date
Indicatif regional et no de tél. (416) 234-5100 Jane Doe January 22, 2017
B13A (4)
5. Item 6. Marks 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number and criterion weight or invoices
numbers other quantity
of
packages
1 Scam Barbina dolls 1,000 EXE01-003
Toys 25 fibreboard cartons pcs
#1-25 HS#: 9503.90.00.89
Date: 01/10/17
_________Canada___________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
_________Germany___________________
(importing country)
Commercial Invoice
Canadian Manufacturing Inc.
5678 Mississauga Rd.
Mississauga, ON, X1B 2B3
1. Invoice Date 2. Sale Date 3. Invoice No. 4. Page
Preston
Barbeque parts 374 Pcs. 135.00 50,490.00
Barbeque
HS#:
34 crates Netherlands
8540.20.90.00
23. Gross Weight 24. Net Weight 25. Sub-total 50,490.00
2,000 kg 1,870 kg
32. Signature 26. Packaging 1,300.00
27. Domestic Freight 150.00
Jane Doe 28. International Freight 2,850.00
of Canadian Manufacturing Inc. 29. Insurance N/A
30. Other N/A
33. Date June 15, 2017 31. Invoice Total 54,790.00
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page 1 of 1
1. Business no. No d’entreprise 667786124 RM 003 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom Canadian Manufacturing Inc.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
5678 Mississauga Rd. Mississauga ON, Canada X1B 2B3
4. Consignee information – Renseignements sur le destinaire
Name – Nom Preston Barbeque
No. and street – No et rue
967 Cleaver Avenue
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
Rotterdam Netherlands 09900
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
Netherlands
6. Name of exporting carrier, freight forwarder, or consolidator-Nome du
transporteur, du transitaire ou du groupeur de merchandises a exporter
Canadian Mediterranean Line yyyy/mm/dd. time – 24hr, export reporting office code, reference no.
aaaa/mm/jj, heure – 24h, code du bureau de déclaration d’exportation, n o de reference
7. Transport document no. – No due document du transport
111111111
8. Mode of transport from place of exit – Mode de transport à partier du bureau de
Highway
sortie Rail Marine Air
Routier Ferroviaire Maritime Aérien 9(b) Goods inspected by customs – Marchandises inspectées par les douanes
Other (specify) Yes - Qui
Autre (précisez) ________________________________
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
S.S. Star, voyage 14E 2017/06/20
12. No. packages – N de colis
o
Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
34 Crates Montreal, Canada
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
United States Dollars 2,000 kg bureau de sortie 50,490.00
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
$150.00
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire. Jane Doe CIFFA Forwarder
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
1234 Islington Ave., #706 Toronto Province/État, pays postal Exporter Other
ON, Canada M8X 1Y9 Exportateur Autre
Area code and tel. no. Signature Date
o
Indicatif regional et n de tél. (416) 234-5100 Jane Doe June 18, 2017
B13A (4)
5. Item 6. Marks and 7. Number and kind of packages: description of 8. Origin 9. Gross weight 10. Number and date
number numbers of goods criterion or other quantity of invoices
packages
1 Preston Barbeque parts 2,000 kg PP-060101
Barbeque 34 wooden crates
HS#: 8540.20.90.00
Date:
06/15/17
_________Canada___________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
_________Netherlands___________________
(importing country)
Commercial Invoice
Great Glass Works of Kitchener Inc.
1234 Schwaben Ave.
Kitchener, ON, G6H 1S1
1. Invoice Date 2. Sale Date 3. Invoice No. 4. Page
Francois
Glass figurines 432 Pcs. 4.00 1,728.00
Glass
24 cartons Belgium HS#: 7013.99.00.95
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page 1 of 1
1. Business no. No d’entreprise 987564345 RM 003 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom Great Glass Works of Kitchener Inc.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
1234 Schwaben Ave. Kitchener ON, Canada G6H 1S1
4. Consignee information – Renseignements sur le destinaire
Name – Nom Francois Glass B.V.
No. and street – No et rue
312 Rue de la Fleur
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
Brussels Belgium 10098
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
Belgium
6. Name of exporting carrier, freight forwarder, or consolidator-Nome du
transporteur, du transitaire ou du groupeur de merchandises a exporter
Lufthansa air cargo yyyy/mm/dd. time – 24hr, export reporting office code, reference no.
aaaa/mm/jj, heure – 24h, code du bureau de déclaration d’exportation, no de reference
7. Transport document no. – N due document du transport
o
111111111
8. Mode of transport from place of exit – Mode de transport à partier du bureau de
Highway
sortie Rail Marine Air
Routier Ferroviaire Maritime Aérien 9(b) Goods inspected by customs – Marchandises inspectées par les douanes
Other (specify) Yes - Qui
Autre (précisez) ________________________________
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
2017/07/20
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
24 Cartons Toronto, Canada
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
Canadian Dollars 300 kg bureau de sortie 1,853.00
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
$125.00
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire. Jane Doe CIFFA Forwarder
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
1234 Islington Ave., #706 Toronto Province/État, pays postal Exporter Other
ON, Canada M8X 1Y9 Exportateur Autre
Area code and tel. no. Signature Date
o
Indicatif regional et n de tél. (416) 234-5100 Jane Doe July 18, 2017
B13A (4)
3. Means of transport and route (as far as known) 4. For official use
Lufthansa air cargo
Flight :LH365
5. Item 6. Marks and 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number numbers of criterion weight or invoices
packages other quantity
1 Francois Glass figurines 432 pcs GGW-0715-X
Glass 24 cartons
HS#: 7013.99.00.95
Date: 07/12/17
_________Canada___________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
_________Belgium___________________
(importing country)
Umbrellas
Harrods HS#: 9503.90.00.89 16 Ctns. 1,200.00 19,200.00
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page 1 of 1
1. Business no. No d’entreprise 234654376 RM 004 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom Rain & Shine
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
432 Avenue Rd. Toronto ON, Canada M4Y 8Z3
4. Consignee information – Renseignements sur le destinaire
Name – Nom Harrods of London
No. and street – No et rue
1 Nottingham Place
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
London United KIngdom W11 1BB
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
United Kingdom
6. Name of exporting carrier, freight forwarder, or consolidator-Nome du
transporteur, du transitaire ou du groupeur de merchandises a exporter
British Airways yyyy/mm/dd. time – 24hr, export reporting office code, reference no.
aaaa/mm/jj, heure – 24h, code du bureau de déclaration d’exportation, n o de reference
7. Transport document no. – No due document du transport
111111111
8. Mode of transport from place of exit – Mode de transport à partier du bureau de
Highway
sortie Rail Marine Air
9(b) Goods inspected by customs – Marchandises inspectées par les douanes
Routier Ferroviaire Maritime Aérien
Yes - Qui
Other (specify)
Autre (précisez) ________________________________
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
2017/03/15
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
16 Cartons Toronto, Canada
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
16. Origin - Origine 17. Item description – Description d’article 18. HS Commodity Code- 19. Qty. & unit of 20. Value F.O.B place of
Code de merchandise du measure Qté & exit Valeur f.à.b. bureau de
Country Province SH unité de mesure sortie
Pays
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire. Jane Doe CIFFA Forwarder
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
1234 Islington Ave., #706 Toronto Province/État, pays postal Exporter Other
ON, Canada M8X 1Y9 Exportateur Autre
B13A (4)
2017 Page | 134
Answers Commercial Documentation and Regulatory Compliance
3. Means of transport and route (as far as known) 4. For official use
British Airways
Flight : BA642
5. Item 6. Marks and 7. Number and kind of packages: description of goods 8. Origin 9. Gross 10. Number and date of
number numbers of criterion weight or invoices
packages other quantity
1 Harrods Umbrellas 425 kg RS-067
16 cartons
HS#: 6601.99.00.00
Date: 03/10/17
_________Canada___________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
_________United Kingdom_________________
(importing country)
Commercial Invoice
Ontario Baby Supplies Ltd.
147 Queen Street
Brampton, ON, L7P 3S9
1. Invoice Date 2. Sale Date 3. Invoice No. 4. Page
Ocean On account
16. 17. 18. 19. 20. 21. 22.
Number and Marks and Description of Item Quantity Unit of Unit Total
Kinds of Numbers Measure Price
Packages
Canada Border Agence des services EXPORT DECLARATION PROTECTED (WHEN COMPLETED)
Services Agency frontaliers du Canada DECLARATION D’EXPORTATION PROTEGE (UNE FOIS REMPLI) C
Original Amended-Modifie Void-Nul Copy-Copie ______ of-de _____________
See completion instructions-PLEASE PRINT-Voir la facon de remplir le formulaire-EN LETTRES MOULEES S.V.P. Page 1 of 1
1. Business no. No d’entreprise 556473829 RM 002 2. Export permit/licence no. (if applicable)-No du permis/de la licence d’exportation (s’il y a lieu)
3. Exporter information (includes non-resident) – Renseignements sur l’exportateur (y compris les non-résidents)
Name – Nom Ontario Baby Supplies Ltd.
No. and street – No et rue City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
147 Queen Street Brampton ON, Canada L7P 3S9
4. Consignee information – Renseignements sur le destinaire
Name – Nom Bebes R Ci S.A.
No. and street – No et rue
134 Norde Calle
City – Ville Province/state, country – Province/État, pays Postal Code – Code postal
Valparaiso Chile 2340000
5. Country of final destination – Pays de destination finale 9(a) Customs proof of report no. – No de la prevue de déclaration des douanes
Chile
6. Name of exporting carrier, freight forwarder, or consolidator-Nome du
transporteur, du transitaire ou du groupeur de merchandises a exporter
Dragon Lines yyyy/mm/dd. time – 24hr, export reporting office code, reference no.
aaaa/mm/jj, heure – 24h, code du bureau de déclaration d’exportation, no de reference
7. Transport document no. – No due document du transport
111111111
8. Mode of transport from place of exit – Mode de transport à partier du bureau de
Highway
sortie Rail Marine Air 9(b) Goods inspected by customs – Marchandises inspectées par les douanes
Routier Ferroviaire Maritime Aérien
Other (specify) Yes - Qui
Autre (précisez) ________________________________
10. Vessel name (if applicable) – Nom due bateau (s’il y a lieu) 11. Date of export (yyy/mm/dd) – Date de’exportation (aaaa/mm/jj)
S.S. Aldaris 2017/11/05
12. No. packages – No de colis Kind of packages – Genre de colis 13. Place of exit – Bureau de sortie
1,200 Cartons Montreal, Canada
Container no. – No de conteneur 14. Exporter reference no. (if applicable) – No de référence de l’exportateur (s’il y a lieu)
21. Currency used for declared value – Devise de la valeur declare 22. Gross weight – Poids brut 23. Total value F.O.B place of exit – Valeur totale f.à.b.
Canadian Dollars 16,330 kg bureau de sortie 24,600.00
24. Freight charges to place of exit, estimated if unknown (included in field 20) – 25. If goods are not sold, state reason for export (if applicable). If a lease or rental, state
Frais de transport jusqu’au bureau de sortie, estimé si inconnu (compris à la zone period – Si les merchandises ne sont pas vendues, motivez le’exportation (s’il y a lieu). S’il
20) s’agit d’une location ou d’un bail, précisez la periode.
$750.00
26. Customs service provider information (if applicable) – Renseignements sur la fournisseur de services douaniers (s’il y a lieu)
Name of person responsible for completion – Nom de la personne Company name – Nome de la compagnie
responsible de remplir le formulaire. Jane Doe CIFFA Forwarder
No. and street – No et rue City – Ville Province/state, country – Postal Code – Code 28. Status – Statut
1234 Islington Ave., #706 Toronto Province/État, pays postal Exporter Other
ON, Canada M8X 1Y9 Exportateur Autre
Area code and tel. no. Signature Date
o
Indicatif regional et n de tél. (416) 234-5100 Jane Doe November 1, 2017
B13A (4)
5. Item 6. Marks and 7. Number and kind of packages: description of goods 8. Origin 9. Gross weight 10. Number and date
number numbers of criterion or other quantity of invoices
packages
1 Bebes R Baby formula 16,330 kg OBS-0863
Ci S.A. 1,200 cartons
HS#: 1901.10.90.90
Date:
10/31/17
_________Canada___________________
(country)
This area is generally where the local
and that they comply with the origin requirements specified for those goods in
Chamber of Commerce will certify the the Generalised System of Preferences for goods exported to
document, stamp, sign and date.
_________Chile_________________
(importing country)
The given scenario might be a little extreme but it shows the importance of the need for
proper Incoterms in assigning insurable interest. Also note that there is “no obligation”
on either party to insure the cargo, but it is always advisable to do so. Imagine this
scenario in reverse, and you have a customer buying goods, FCA Paint Factory Stuttgart,
local forwarder, Incoterms® 2010, moving by truck for a vessel in Hamburg via the
autobahn. Your customer buying the goods has an insurable interest in the goods from
the moment they leave the factory in Germany.
You should always discuss with your customer not only the need for the accurate use of
Incoterms, but also the importance of insurance coverage and insurable interest. You
should be aware of the implications of each as it affects insurance. This refers back to
our Incoterms. As complicated as they may seem, we have seen that responsibilities are
clearly stated. DO NOT rely on the “information” written on the back of a bill of lading to
provide “coverage” for your customer.
The purpose of an insured value is to show an accurate value of goods at the point of
destination. This value is always higher than the value of goods at factory, because by
the time goods arrive at the destination money has been spent on various freight charges,
handling, insurance and even duty/taxes.
Example Question:
Calculate the insured value and determine the premium for the following shipment
on 110% of CIP value, and complete the certificate of insurance. The insurance
premium has been sold at 0.38% of insured value, all risk.
Shipment details:
Freight charges:
What is the “CIP” value? It is the sum of the cost of the goods, plus the freight charges,
to get the goods to the named destination, plus an estimated insurance premium.
Our estimated premium will be the cost of the goods, plus freight charges, multiplied by
the insurance rate.
Cost of freight:
Inland cartage Korea .............................. US $350.00
Ocean freight .......................................... US $1,800.00
Documentation ....................................... US $75.00
Estimated premium ................................ US $225.06
“CIP” value is ......................................... US $59,450.06
The question asks the insured value on 110% of the “CIP” value.
Our insured value on 110% of “CIP” value = US $59,450.06 x 110% (or x 1.1)
Therefore, our insured value on 110% of the “CIP” value is: US $65,395.07
Our insurance premium, which is based on 110% of the “CIP” value is:
Summary:
Insured value is US $65,395.07; insurance premium is US $248.50.
Comments: In this case the insurance underwriter allows the customer to essentially
insure the insurance. This is allowed for shipments that have the Incoterm “CIF” or “CIP”
stated. However, this is usually stipulated in an agreement between the buyer and the
seller. Generally, there is some form of statement in the purchase contract directing the
buyer to insure the goods at the CIF or CIP value plus a given percentage. If these
specific instructions are not given, then the minimum insurance requirements, as provided
by Incoterms® 2010, will prevail.
The generally accepted practice in calculating the insured value is: the cost of goods,
plus the cost of freight, multiplied by 110% (adding 10% the total). This figure becomes
the insured value to which the premium is applied. Examples would be “Ex-Works”,
“FCA”, “DAT” shipments where there is no obligation to insure the shipment, but parties
accepting the risk will want to insure their risk.
This does, however, vary from commodity to commodity. Fine fashion clothing where the
“mark-up” is 200% might be allowed to add this 200% to their cost of goods and freight,
in place of the standard 10%. These are case-by-case issues that a professional
forwarder will have to address as they arise.
It is quite normal to round to the nearest full $100.00 for cost and freight value, and round
up to the nearest full $1,000.00 for the insured value. The exception, of course, is for a
letter of credit, where the value is generally stipulated.
The previous example shows the calculation of insurance premium on the movement
portion of the transaction, but what about the customs portion of the transaction? It is
possible to insure the duties and taxes paid out upon the importation of the goods.
The amount of money paid out in duties and taxes can be a large sum. Imagine if a large
amount was paid out and the goods arrive at the warehouse damaged beyond repair.
One would like to recover the money they have paid out. It is best then to insure the
customs portion of the transaction. All underwriters will usually grant a special premium
for the duty portion of the value for insurance, provided you declare the amount for
duty/taxes separately in your declaration. Usually that reduced premium for duty is about
1/3 of the cargo premium.
Using the details from the previous example, determine the insured value and insurance
premium for the customs portion of the shipment.
Calculation:
Therefore, the amount of money paid out by the importer at time of import is:
Summary:
Amount of insurance for the duties and taxes is: CAN $17,519.93
Insurance premium paid is: CAN $21.02
1. Calculate the insured value at CIP + 10% and state total premium payable.
Show your detailed method of calculation for all steps.
2. Determine the insured value at CIP + 10% and insurance premium for the
shipment described below:
The following is to cover and explain some of the basic aspects of insurability and
exclusions of coverage, including an example of an insurance certificate and instructions
on the completion.
The section on Cargo Insurance touches only slightly on some of the fundamental issues.
These issues are of concern to a forwarder when dealing frequently with arranging marine
insurance cover. Therefore the forwarder, as an intermediary, needs to know exactly
what the position of a marine underwriter is so that he can give the proper explanation to
the client or shipper.
i) Nature of losses
All losses must be of a fortuitous nature which, loosely defined, means “of an
unpredictable nature”.
That is why the textbook tells you that an inherent vice - something predictable - IS
NOT insurable.
Another area in which you may be in conflict with the condition of underwriters that all
losses must be of a fortuitous nature is the aspect of proper packaging, which, of course,
includes export crating, proper stowage and bracing of container contents.
It is a standard part of any marine insurance policy or certificate that damage caused by
insufficient and unsuitable packing is excluded from coverage.
In any case, whenever such surveyor report indicates the cause of loss or damage to be
the result of inadequate packaging, underwriters will not pay referring to their articles of
exclusion in the policy/certificate.
The reason for these exclusion clauses is, of course, that damage for improperly
packaged goods becomes as good as predictable and any such damage is no longer
fortuitous in nature. That is why it is so important that the forwarder, in any discussion
about any shipment he is about to handle and arrange insurance coverage for, keeps a
sharp eye open for any indication of insufficient export packing or any lack of expertise to
load, stow and brace a container properly.
In the event there are such indications, it is the freight forwarder’s duty to counsel the
client about the serious consequences which may result from improper packaging.
Let us go a little beyond ordinary export packing or container stowage. Think about the
exposure of any cargo shipped on a flat rack container or an open-top container when the
tarpaulin is not replaced on the container due to the height protrusion of the cargo.
Regardless of whether such cargo is within or outside the container gauges, flat-rack
containers and open-top containers with extra height are usually stowed on board of the
container vessel on the upper (outside) tiers of the container racks. That kind of stowage
aboard the vessel exposes the container to all risk of weather and the seas.
When the forwarder knows that cargo will be shipped on a flat-rack or high-cube container
and he knows the specific commodity involved, which might be delicate machinery or
other equipment, he has the obligation to point out these possibilities and potential
influences to the client.
It could very well be that as a result of the freight forwarder’s explanation, the
quotation/suggestion for a flat-rack container, etc. is not accepted by the client. In which
case such refusal should really be a challenge to the forwarder to find another alternative
without such risk factors.
The exclusions discussed below all have their base on the principle of fortuity of losses.
You should become familiar with the various exclusions for the different cargo classes.
As we all know, all risk coverage is not necessarily “all risk”.
Further, we will examine some practical areas you may frequently have to deal with.
Vehicles
New vehicle underwriters will usually accept for ICC Clause (A) or all risk with the
following general restrictions:
If shipped RO-RO, coverage only applies while the new vehicle is in custody of a
public common carrier (truck or vessel). Marine coverage is usually not available
while vehicles are driven under their own power. In such a case the regular public
car liability insurance takes over.
Exception in coverage:
b) The problem of predictable and/or pre-existing damage for any items that are
unpacked.
You will have the ROD/SCMD exclusion also on uncrated items of steel, machinery,
equipment, etc., for obvious reasons, of course.
It is always a problem to obtain an all-risk coverage for any used machinery or equipment.
In the event you hide the fact that there is used machinery, or even if you are unaware of
that fact, and the forwarder or the insured discover this fact, underwriters, in the event of
claim, would refuse the claim. In such a case the forwarder or his shipper have broken a
fundamental legal principle of marine insurance called “utmost good faith”.
The reason used machinery is a problem for the underwriter regardless of whether that
machinery is crated or not, is the fact that underwriters do not know the exact condition
of such used machinery prior to commencement of the transit.
It is possible to overcome this problem at least for larger shipments by arranging a pre-
shipment survey, at the expense of the insured, by an underwriter-appointed local
surveyor. The idea of the survey is to pinpoint exactly all existing conditions as well as
acceptability of the packing. A survey is a very detailed process for each single piece of
equipment and may include photographs.
The usual daily fee of a surveyor can vary between CAN $450.00 – CAN $650.00 per day
plus expenses for travelling, photos, etc.
In the event there are claims later at destination, and even if a detailed pre-shipment
survey was made, it is usually very difficult to determine at destination, which part is really
a new transit claim and which part is really a pre-existing condition.
The fact the pre-shipment survey and the damage survey at destination are usually in two
different languages, does not make the process of identifying, so-called new damage,
any easier.
It is for all these reasons that you will find that most underwriters will simply only accept
a coverage on basis of Institute Clause C, or what used to be called FPA, meaning
coverage for total loss only.
When a forwarder is involved in selling his client insurance coverage for such shipments
of used machinery he is well advised to insist with the client that only a coverage on basis
of Institute Clause C or FPA is available.
In the event the forwarder fails to explain this situation in detail and there is a claim, the
forwarder may well find that the client or the insured may hold him responsible.
Geographical Limits
Many CIFFA forwarders’ open policies will have geographical limits. Often the policy will
state “from North America to the world, with some exceptions”. Caution is warranted
when shipping to and from areas with political or civil conflicts or where the infrastructure
is known to be of concern. There are legislative documents outlining geographical areas
of concern. You should always check with your underwriter if you are unsure.
Marine Certificate
Normally there are 6 copies of the certificate. The first 2 are considered the original and
duplicate. These can become part of the shipping documents and are to be used to make
a claim, if necessary. You must always keep in mind that an insurance certificate is a
negotiable document, and should not be treated lightly.
Referring to the marine insurance certificate on the following page, below is the procedure
to complete the certificate:
“B” Location where the certificate is issued, city and country, along with the date of
issuance.
“D” Certificate No.: supplied by underwriter, generally the forms are previously
numbered.
“E” Open Policy No.: This is the forwarder’s policy number assigned by underwriter.
“I” The amount of insurance coverage in figures, preceded by the unit of currency,
e.g., CAD – Canadian, USD – American, GBP – British Sterling
“J” Name of ocean vessel with voyage number or airline with flight number.
“L” The scheduled date of departure. It is always best to write “on or about” prior to
the departure date.
“Q” Enter accurately number and type of packaging, a complete description of the
insured goods. You may reference invoice number, PO numbers, and letter of
credit number here.
“R” The city and country where any claims would be paid. It could be the origin,
destination or a third named country where a claims settling office would be
located.
“S” In this area you would enter any express warranties, e.g., warranted professionally
packed, or excluding, marring, chipping and oxidation, or no risk after discharge,
or any deductibles amounts that would apply.
“U” The company’s signature, usually this signature is actually part of the certificate.
Please note that some underwriters do not demand an insurance certificate for every
shipment, e.g., air cargo, land transportation, customs duties. Usually some type of
monthly summary reporting form is used.
This Certificate is not valid unless countersigned Signed on behalf of the Company
by the Assured or their authorized Agent.
“T” “U”
1. For the example question used for Exercise 5.3 (Preface), write up the insurance
certificate for this shipment.
Local Vessel or Conveyance Local Port or Place of Origin Insured Value (in words)
Currency Figures
Ocean Sea/Air Port of Date of Departure Claims Settling
Vessel/Aircraft Loading Agent
CONDITIONS OF INSURANCE
Subject to Institute Cargo Clauses (A) or Institute Cargo Clause (Air), whichever is applicable or unless otherwise indicated above (*).
Including War, Strikes, Riots, and Civil Commotions as per Institute Clauses.
IMPORTANT
This Certificate is subject to the terms of the Open policy, provided, however, that the right of a bone fide holder of this Certificate for value
shall not be prejudiced by any terms of the Open Policy, which are in conflict with this Certificate.
SURVEY AND CLAIMS SETTLEMENT
In the event of loss or damage which may involve a claim under this insurance, notice must be given immediately to the above noted
Agents so they may appoint a Surveyor if required.
LIABILITY OF CARRIERS, BAILEES, OR OTHER THIRD PARTIES
It is the duty of the Assured and/or their Agents, in all cases, to take such measures as may be reasonable for the purpose of averting or
minimizing a Loss and to ensure that all rights against Carriers, Bailees, or other third parties are properly preserved and exercised.
In particular, the Assured, or their Agents, are required to follow the procedure as outlined.
This Certificate is not valid unless countersigned Signed on behalf of the Company
by the Assured or their authorized Agent.
The following terms are valid for shipments of new general merchandise shipped on
approved steamer, aircraft and/or other conveyances to and from places in the world
(except countries/places mentioned as, “On Application”).
These rates are applicable only when goods are stowed below deck or containerized.
Oceangoing vessels are approved if classified “A1” American Record, “100 A1” or
“B.S.” Lloyd’s Register or the equivalent. Vessels over 15 years of age must maintain
a regular pattern of trading on an advertised schedule to load/unload at specified ports.
Also, bulk or combination carriers and mineral oil tankers exceeding 50,000 GRT must
NOT be over 10 years of age. (These requirements do not apply within the port area.)
Gotta Go is a full service international freight forwarder and regular CIFFA member.
Gotta Go provides its customers with the opportunity to obtain insurance coverage on
imports and exports under its open cargo policy (see the Cargo Insurance Guidelines
above).
Export Electronics Inc. is a new importer (for one year) and exporter (very recent) of
cellular telephones and personal digital assistants (PDA).
Export Electronics imports from Malaysia, India and the Philippines for Canadian
domestic distribution on a CIP Hamilton basis;
Very recently they also obtained distribution rights to Mexico, Argentina, Chile,
Peru and Venezuela for its products and have begun to export to these countries;
Each phone and PDA is packaged in a retail cardboard carton weighing 0.5 kg and
each order is palletized and shrink-wrapped by the shipping department at Export
Electronics with country specific language instructions and labels. Each phone is
valued at US $50.00 and each PDA at US $100.00.
Export Electronics Inc. estimates exports by ocean freight and air freight for 2017
will average:
Scenario A: Gotta Go Freight Forwarding visits Export Electronics during the early days
of its South American distribution start-up to offer them freight forwarding services. Until
now, Export Electronics has not yet shipped by ocean export and has dealt with the
airlines directly for air exports. They have no cargo insurance, assuming that the carrier
will pay for any damages. On the third air export shipment, they encounter a problem.
Export Electronics shipped its first order to Argentina via air freight from
Montreal’s Trudeau International Airport (YUL) to Buenos Aires (BUE):
When the goods were received at BUE by the importer, notations were made on the
AWB that 60 cartons were received (loose, not palletized) and that of the 60 cartons
received, 30 cartons were crushed.
2. Importer’s broker did file a “notice of claim” with the carrier within 24 hours of
receipt of the shipment.
4. EE filed a claim in Montreal within 90 days after the AWB issue date with the
carrier for US $5,500.00. (Lost cartons + re-packaging/freight + labour + original
air freight charges)
Consider the facts above, the material covered in the program and your
knowledge to answer the following questions.
1. What documents will Export Electronics need to submit for the claim to be
considered by the airline?
3. If the carrier pays the claim, how much will be paid? What is the basis of the
calculation?
Scenario B: the Gotta Go sales representative works with her air & ocean export
managers and makes a presentation to Export Electronics for both inbound and outbound
air and ocean freight. Included in the presentation is a scenario of what would have
happened if they had utilized the services of Gotta Go for the air export, including cargo
insurance cover under Gotta Go’s open policy (refer to the Guidelines).
Consider the facts above, the material covered in the program and your
knowledge to answer the following questions.
2. Calculate the insurance premium Gotta Go would have charged them for this air
freight shipment. (CIF + 10% x Premium)
3. Given that the claim is supported properly, what amount would the insurance
company pay to Export Electronics? Explain your answer.
5. List some benefits Export Electronics would achieve if the CIFFA forwarder
provided insurance cover on imports and exports.
Part of your duty as a freight forwarder is to handle the “intent to claim” by his customer.
Timely submission to carriers or the forwarder’s advice to the customer about submission
to carriers has to follow the process below. The handling procedures cover two scenarios:
Complete the flow chart on the following pages, putting the steps below in the right
order:
CARGO INSURANCE
START
CLAIMS HANDLING
PROCEDURES
No
Yes
No No
Yes Yes
B C END
B C
Yes No
END
END
An insurance policy is the contract between the insurer and the insured.
It states the perils against which the policy gives protection and in what
amount.
It is a document, which acts as the contract between the insurer and the
insured. The certificate provides details of insurance coverage as well
as transportation details and particulars of the shipment.
8. Risk of war, strikes, civil commotion, and mines are usually excluded on
marine cargo policies. How would you obtain coverage?
An express warranty or a specific additional agreement made with the
insurance underwriter, must be written into the insurance certificate. For
this additional coverage an additional premium is generally charged.
10. What does inherent vice mean? Is this covered in an all risks policy?
3) The voyage must come to a safe end. Essentially, part of the cargo is
sacrificed in order to save the “rest” of the cargo. The costs of a general
average are shared proportionately among all who had cargo aboard the
ship. This includes those who lost cargo.
13. When general average has been declared for a vessel arriving at the ocean
port, what will an average adjuster require from you before your cargo is
released?
If the goods are not insured, the average adjuster, prior to the release of
the goods, will require a cash deposit for the share of the estimated
average loss. If the shipment was insured, an unlimited underwriter’s
guarantee is required for the release of the goods.
Value of shipment
FCA local forwarder Hong Kong US $70,000.00
Ocean freight Hong Kong to Toronto US $1,050.00
TOTAL US $71,385.17
NO !!
1. Calculate the insured value at CIP + 10% and state total premium payable.
Show your detailed method of calculation for all steps.
Canadian Duty/Taxes
In Canada the correct value for duty is the so-called transaction value. This means
depending on the terms of delivery (Incoterms® 2010), value for duty can be either
the FCA value or the CIP value, but when having a CIP value, Revenue Canada
permits deduction of foreign freight charges before arriving at value for duty.
Practically, you are back to square one or the FCA value at foreign port of export.
Therefore, using the FCA value of goods as value for duty in the import sample of
the exercises does reflect the proper basis for establishing cost of duty/taxes.
This is not a customs broker course, nor are you expected to know the exact
procedure for duty calculation. In a practical situation you would simply ask the
customs broker or your customs department clearing your shipment for this
information.
It is hoped that you were alert in spotting the difference between a value for duty
as opposed to a value for insurance without getting confused.
2. Determine the insured value at CIP + 10% and insurance premium for the
shipment described below:
Scenario A:
1. What documents will Export Electronics need to submit for the claim to be
considered by the airline?
Cover letter (dated, signed with statement of claim including dollar amount),
bill of lading, MAWB, pro-bills, commercial invoice(s) for entire shipment,
packing list, copy of delivery receipt (notated), repair invoice or other, copy
of claim or intent to claim.
Yes – within timeframe, all notices and documents completed, clearly their
loss.
3. If the carrier pays the claim, how much will be paid? What is the basis of the
calculation?
Scenario B:
2. Calculate the insurance premium Gotta Go would have charged them for this air
freight shipment. (CIF + 10% x Premium)
3. Given that the claim is supported properly, what amount would the insurance
company pay to Export Electronics? Explain your answer.
Change terms of delivery to FCA origin and take out cargo insurance
coverage.
5. List some benefits Export Electronics would achieve if the CIFFA forwarder
provided insurance cover on imports and exports.
START
CARGO INSURANCE
CLAIMS HANDLING
Yes
Seek
management
Cargo Customer No
No advice: options:
insurance carries own 1. Claim with
provided by insurance? carrier 2. Assist
forwarder?
client to claim
with carrier
Yes Yes
B C END
B
C
Survey
required
Send intent to claim
?
and all other required
documents to allow
client to process claim
Yes
Arrange survey
Follow up with client to
ensure claim
progressing
3. What is the name of Canada’s security program that helps reduce contraband,
smuggling, and terrorism?
9. Canada has a National Security Policy. What are the three (3) key elements
in this policy?
10. What are the three (3) core national security interests of this policy?
11. What are the key new measures that the government of Canada will invest in
to fulfill its security responsibilities and activities?
14. What are the three (3) main objectives of export reporting?
Vessel:
Aircraft:
Rail:
Other:
18. When did the Canadian Government specify that the ISPS Code for port and
port facilities become operational?
21. What must a Canadian freight forwarder first sign to becomes part of the
Transport Canada Air Cargo Security Program?
2. What are two (2) other terms that may also mean dangerous goods?
7. For these three (3) activities: handling, offering for transport, transporting
dangerous goods; which one(s) could apply to the following persons?
Shipper/exporter/importer:
Freight forwarder:
Carrier:
8. What are the two (2) main responsibilities of freight forwarders regarding
dangerous goods?
9. Under what conditions can a person legally handle, offer for transport, or
transport dangerous goods?
10. In Canada, how long is a dangerous goods training certificate valid for?
Air mode:
Ground mode:
Ocean mode:
11. In Canada, are there any situations when a dangerous goods training certificate
would expire in a shorter period than in Question 10?
12. In Canada, who must sign a dangerous goods training certificate to make it
valid?
15. How many Classes of dangerous goods are there, and what do they relate to?
Class 1:
Class 2:
Class 3:
Class 4:
Class 5:
Class 6:
Class 7:
Class 8:
Class 9:
17. What are the three (3) Packing Groups, and what do they relate to?
i) Packing Group I:
ii) Packing Group II:
iii) Packing Group III:
19. Other than the “diamond-shaped” hazard labels, what other labels/marks are
there for the transportation of dangerous goods by air?
21. What are the four (4) types of documents that may be used for dangerous goods
shipments?
23. In Canada, what additional two (2) pieces of information must be indicated on the
transport document for dangerous goods?
24. What are the five (5) BASIC steps to follow during a dangerous goods
emergency?
27. What two (2) reports may you have to make to Transport Canada regarding a
dangerous goods occurrence?
28. If found guilty of an offence under the TDGR, what punishment could be levied?
29. According to Transport Canada, how long must dangerous goods paperwork be
kept on file?
Apple Shenzhen, China, assembles the hardware, holds inventory, and handles the
picking, packing, and shipping. Parts are sourced from Singapore, Taiwan, and U.S.
ii) After completing your flowchart, list possible weak points regarding cargo security
(theft and terrorism).
iii) Which Canadian or U.S. security programs may help create a more secure
supply chain for the iPhone?
1. Review the following excerpt from the International Air Transport Association’s
(IATA) Dangerous Goods Regulations and answer the following questions:
* Not everyone will get all these details, and you are not expected to. You all
should get the first 4 or 5.
2. Review the following excerpt from the International Maritime Organization’s (IMO)
Dangerous Goods Code and answer the following questions:
*Not everyone will get all these details, and you are not expected to. You all
should get the first 5 or 6.
*Not everyone will get all these details, and you are not expected to. You all
should get the first 5 or 6.
A B C D E F G H I J K L M N
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
3. What is the name of Canada’s security program that helps reduce contraband,
smuggling, and terrorism?
Partners in Protection (PIP).
9. Canada has a National Security Policy. What are the three (3) key elements
in this policy?
1. A high-level federal-provincial-territorial forum on emergencies.
2. The National Security Advisory Council will give the government
advice
on evaluating and improving the system.
3. A cross-cultural roundtable on security.
10. What are the three (3) core national security interests of this policy?
11. What are the key new measures that the government of Canada will invest in
to fulfill its security responsibilities and activities?
1. Enhancing intelligence capabilities.
2. Securing critical government information systems.
3. Fully implementing the RCMP Real Time Identification Project and
improving the national fingerprint system.
4. Implementing the Passport Security Strategy.
14. What are the three (3) main objectives of export reporting?
Vessel: Not less than 48 hours before being loaded on the vessel.
Aircraft: Not less than 2 hours before being loaded on the aircraft.
Rail: Not less than 2 hours before the railcar containing the goods is
assembled to form part of the train for export.
Other: Immediately prior to exportation of the goods.
18. When did the Canadian Government specify that the ISPS Code for port and
port facilities become operational?
July 1, 2004.
21. What must a Canadian freight forwarder first sign to becomes part of the
Transport Canada Air Cargo Security Program?
Possible solutions:
Possible solutions:
2. What are two (2) other terms that may also mean dangerous goods?
7. For these three (3) activities: handling, offering for transport, transporting
dangerous goods – which one(s) could apply to the following persons?
Shipper/exporter/importer: handling, offering for transport, transporting.
Freight forwarder: handling, offering for transport, transporting.
Carrier: handling, transporting.
8. What are the two (2) main responsibilities of freight forwarders regarding
dangerous goods?
9. Under what conditions can a person legally handle, offer for transport, or
transport dangerous goods?
10. In Canada, how long is a dangerous goods training certificate valid for?
11. In Canada, are there any situations when a dangerous goods training certificate
would expire in a shorter period than as stated in the previous question?
12. In Canada, who must sign a dangerous goods training certificate to make it valid?
15. How many Classes of dangerous goods are there, and what do they relate to?
9 Classes; they relate to the type of hazard they represent.
17. What are the three (3) Packing Groups, and what do they relate to?
Packing Groups I, II, and III; they relate to the degree of danger they
represent.
19. Other than the diamond-shaped hazard labels, what other labels/marks are there
for the transportation of dangerous goods by air?
Magnetized materials;
Cryogenic liquids;
Cargo aircraft only;
Package orientation;
Keep away from heat;
Lithium battery;
Environmentally hazardous substances mark;
Limited quantities mark.
21. What are the four (4) types of documents that may be used for dangerous
goods shipments?
IATA Shipper’s Declaration for Dangerous Goods;
Bill of lading;
Multimodal Dangerous Goods Form; and
FIATA Shipper’s Declaration for the Transport of Dangerous Goods.
The shipper/exporter.
23. In Canada, what additional two (2) pieces of information must be indicated on the
transport document for dangerous goods?
24 hour number (for emergencies); and
Emergency Response Assistance Plan and Number (if applicable).
24. What are the five (5) BASIC steps to follow during a dangerous goods
emergency?
27. What two (2) reports may you have to make to Transport Canada regarding a
dangerous goods occurrence?
1. An immediate report.
2. A written report within 30 days.
28. If found guilty of an offence under the TDGR, what punishment could be levied?
1. i)
Possible solutions:
ii)
Possible solutions:
iii)
Possible solutions:
1.
It is forbidden by air.
2.
A B C D E F G H I J K L M N
Packing IBC
UN Proper Shipping Name Class Subsidiary Packing Special Limited Instruc- Provisions Instruc- Provisions
No. (PSN) or risk(s) group provisions quantities tions tions
divi-
sion
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
3. Freight forwarders set their rates based on tariffs obtained from carriers. What
should a freight forwarder look at when quoting these tariff rates?
5. Apart from the obvious charges included in the freight costs, what should be
considered when quoting a customer?
8. What is the factor against which the freight rate is calculated for different modes
of transport?
9. What are the typical weight ratios for air and ocean?
10. What are the standard rules for “rounding off” freight volumes?
11. When weighing and measuring cargo, the carriers make allowances for certain
weights and projections. Name at least two allowances.
14. To avoid a “bidding war” with a client, what are some things a freight forwarder
can do?
1. A carrier quotes you a rate of US $60.00 per revenue ton. A crate of parts
weighs 850 kg and measures 1.3 m L x 1.2 m W x 0.70 m H. What will be the
ocean freight charged by the carrier?
2. You have 4 slabs of granite to ship. Each is strapped to a pallet. The shipping
dimensions of each pallet are 42 in x 48 in x 18 in, and the shipping weight of
each pallet is 710 kg. The carrier has given you a rate of US $75.00 per revenue
ton. How much will you pay the carrier?
3. You have a weekly consolidation service Hong Kong – Vancouver, with direct
costs as follows:
From past experience your marketing department has determined that you need
to load 50 m3 of cargo into a 40-ft standard container, in order to quote your
clients an all-inclusive rate of US $58.00 per revenue ton.
As we are not given any weights, we will have to base all our calculations
on the measure or volume of the freight, in other words, the m3.
a) Last week you only loaded 40 m3 in your container. What was your profit
or loss? Show your calculation.
b) This week you loaded 60 m3 in the container. What is your profit or loss?
Show your calculation.
Base your answer on the fact that sales and marketing has declared when
loading 50 m3 you can quote CAN $80.00 per revenue ton.
3. Once you have presented a quotation to a client, what is the most important
thing to remember to do?
5. What system should you employ to ensure that you invoice the client as per
quotation?
Your customer, Canadian Manufacturing Inc., will be sending barbeque accessories (non-
hazardous) to a new customer in Paris, France. The Purchasing Manager, Mr. John
Smith, has requested an air export rate for the following:
Your pricing desk provides the following buy rate. Your suggested sell rate is plus US
$0.25 on the air freight per kilo rate.
Buy rate:
CHARGES CURRENCY MINIMUM +100 KG +300 KG
Air freight CAD $4.50/kg $4.15/kg
Fuel CAD $0.15/kg $0.15/kg
Security CAD $0.08/kg $0.08/kg
CANADIAN LOCAL
CHARGES
Handling CAD $45.00 per shipment
B13A preparation $17.50 per shipment
NavCan fee $7.00 $0.07/kg
Pick up fee $50.00 $0.20/kg
Terminal handling charge $10.00 $0.04/kg
b) A quotation.
a)
b)
To: From:
Attn:
Fax:
Phone:
Email:
Quote No.:
Quote Date:
Via: Mode:
From: To:
Destinations Curr. Min. +45 kg +100 kg +300 kg +500 kg +1,000 kg Fuel Security
Rate Validity:
Transit time:
Insurance:
Remarks
1. Rates are subject to change with or without notice
2. Origin charges are to the account of the shipper
3. Weight/volume ratio : 6,000 cm3 or 366 in3 = 1 kg
4. Rates are subject to space and equipment availability
5. Rates do not include insurance, customs clearance, duties or taxes
Signature:
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
Your customer, Canadian Manufacturing Inc., will be sending barbeque accessories (non-
hazardous) to a new customer in Basel, Switzerland. The Purchasing Manager, Mr. John
Smith, has requested an ocean export rate for the following:
Your pricing desk provides the following buy rate. Your suggested sell rate is plus US
$25.00 on the per cbm ocean freight rate.
Buy rate:
ORIGIN LOCAL
CHARGES
ACI CAD $30.00 per shipment
Handling charge CAD $60.00 per shipment
Export Declaration fee CAD $17.50 per shipment
Inland pick up CAD $150.00 based on the shipment request
DESTINATION LOCAL
CHARGES
Handling CHF 50.00 per shipment
Terminal handling CHF 10.00/cbm or minimum CHF 20.00
Customs clearance CHF 75.00 flat fee
Delivery CHF 150.00 based on the shipment request
a)
b) and c)
To: From:
Attn:
Fax:
Phone:
Email:
Quote No.:
Quote Date:
Insurance:
Validity:
Transit Time:
Provisos:
1. Rates are subject to change with or without notice
2. Rates are subject to change of GRI, PSS, BAF & CAF as per steamship lines or the industry
3. Rates are subject to space & equipment availability
4. Rates are inclusive of current GRI & PSS
5. For LCL, 1 CBM = 1000 kgs, Minimum chargeable is 1 CBM
6. Rates do not include insurance, customs clearance, duties or taxes
Signature:
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
Your customer, Canadian Manufacturing Inc., would like samples imported from a new
supplier in Hong Kong via air freight. The Purchasing Manager, Mr. John Smith, is
requesting air freight rates. This is the information he provides:
Terms of sale: FCA air carrier Hong Kong, China to Door Toronto GTA
(delivery, handling in Canada to be paid for by
Canadian Manufacturing Inc. Duties and taxes to be
determined once the orders are secured).
Your pricing desk provides the following buy rates and requests you add US $0.25 to
the air freight rate.
Mr. John Smith wants the quotation all in USD.
ORIGIN CHARGES
Pick up fee USD $0.10/kg; $0.10/kg; min.
min. $50.00 $50.00
Handling USD $45.00 per $45.00 per shipment
shipment
Terminal handling charges USD $0.04/kg; $0.04/kg; min.
min. $10.00 $10.00
DESTINATION CHARGES
Handling CAD $45.00 per $45.00 per shipment
shipment
Terminal handling CAD $0.08/kg; $0.08/kg; min.
min. $45.00 $45.00
NavCan fee CAD $0.07/kg; $0.07/kg; min. $7.00
min. $7.00
Delivery CAD $0.30/kg; $0.30/kg; min.
min. $50.00 $50.00
b) A quotation.
a)
b)
To: From:
Attn:
Fax:
Phone:
Email:
Quote No.:
Quote Date:
Via: Mode:
From: To:
Destinations Curr. Min. +45 kg +100 kg +300 kg +500 kg +1,000 kg Fuel Security
Origin Charges:
Rate Validity:
Transit time:
Insurance:
Remarks
1. Rates are subject to change with or without notice
2. Origin charges are to the account of the shipper
3. Weight/volume ratio : 6,000 cm3 or 366 in3 = 1 kg
4. Rates are subject to space and equipment availability
5. Rates do not include insurance, customs clearance, duties or taxes
Signature:
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
1,000 kg
Your customer, Canadian Manufacturing Inc., has found a new supplier in Hong Kong.
For landed cost purposes the Purchasing Manager (Mr. John Smith) is requesting
container rates on a FCA Ocean Carrier Container Yard Hong Kong, China basis for full
container loads to Door Mississauga. The following is the information he provides:
Total volume of containers: he has no idea as they are in the initial stages of
negotiation with their supplier.
Terms of sale: FCA Ocean Carrier Container Yard Hong Kong, China
(delivery, handling in Canada to be paid for by
Canadian Manufacturing Inc. Duties and taxes to be
determined once the orders are secured).
Your pricing desk is unable to negotiate competitive pricing and are awaiting
information pertaining to the total anticipated volume.
Buy rate:
CHARGES CURRENCY 20 FT 40 FT 40 FT HC
Ocean freight USD $2,000.00 $2,400.00 $2,550.00
FCR (fuel recovery USD $250.00 $330.00 $330.00
charge)
CAF (currency USD Included Included Included
adjustment factor)
Carbon tax USD $4.50 $9.00 $9.00
CANADIAN
LOCAL CHARGES
Handling CAD CAN $60.00 per shipment
Terminal handling CAD Included
Delivery GTA CAD CAN $375.00 per container
b) A quotation.
a)
b)
To: From:
Attn:
Fax:
Phone:
Email:
Quote No.:
Quote Date:
Via: Mode:
Origin: Destination:
Commodity:
Charges Currency Minimum LCL 20’ 40’ 40’ HC 45’ HC Reefer
Insurance:
Validity:
Transit time:
Provisos:
1. Rates are subject to change with or without notice
2. Rates are subject to change of GRI, PSS, BAF & CAF as per steamship lines or the industry
3. Rates are subject to space & equipment availability
4. Rates are inclusive of current GRI & PSS
5. For LCL, 1 CBM = 1000 kgs, Minimum chargeable is 1 CBM
6. Rates do not include insurance, customs clearance, duties or taxes
Signature:
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
20-ft STD
40-ft STD
40-ft HC
One should know how to calculate the chargeable weights for air, ocean
and land transportation. A firm understanding of Incoterms is a necessity
as the responsible parties (buyer/seller) are clearly defined.
3. Freight forwarders set their rates based on tariffs obtained from carriers. What
should a freight forwarder look at when quoting these tariff rates?
Be aware of the fact that temporary supply and demand issues can
significantly influence the carrier's price quoted (e.g., peak season
surcharges).
5. Apart from the obvious charges included in the freight costs, what should be
considered when quoting a customer?
The credit terms (freight forwarders are not banks) and time (remember
the amount of time spent faxing, e-mailing and on telephone calls all cost
money).
To obtain the benefit of bulk freight rates from the carrier; or for the
forwarder's own convenience when he is required to forward a number of
smaller shipments to the same destination".
8. What is the factor against which the freight rate is calculated for different modes
of transport?
9. What are the typical weight ratios for air and ocean?
10. What are the standard rules for “rounding off” freight volumes?
11. When weighing and measuring cargo, the carriers make allowances for certain
weights and projections. Name at least two allowances.
Lifting aids, e.g., fitted hooks, lug eyes and rings, bumpers and exhaust
pipes on unpacked motor vehicles.
14. To avoid a “bidding war” with a client, what are some things a freight forwarder
can do?
One way to avoid such a predicament is to "stick to your guns”. Try to
sell the service aspect rather than to participate in eroding rate levels.
Another way is to look for a better mix of cargo in order to maximize the
load factor.
1. A carrier quotes you a rate of US $60.00 per revenue ton. A crate of parts
weighs 850 kg and measures 1.3 m L x 1.2 m W x 0.70 m H. What will be the
ocean freight charged by the carrier?
Rate: US $60.00/m3/1,000 kg.
Volume: 1.3 x 1.2 x 0.7 = 1.092 m3
Weight: 850 kg.
Based on volume:
Charge = US $60.00 x 1.092 m3 = US $65.52
Based on weight:
Charge = US $60.00 x 0.850 = US $51.00
2. You have 4 slabs of granite to ship. Each is strapped to a pallet. The shipping
dimensions of each pallet are 42 in x 48 in x 18 in, and the shipping weight of
each pallet is 710 kg. The carrier has given you a rate of US $75.00 per revenue
ton. How much will you pay the carrier?
Rate: US $75.00/m3/1,000 kg.
Based on volume:
Volume of 1 pallet = [(42 x 48 x 18)/1728] : 35.3147 = 0.594653 m3
Total volume = 0.594653 m3 x 4 pallets = 2.378612 = 2.379 m3
Charge = US $75.00 x 2.379 m3 = US $178.50
Based on weight:
710 kg x 4 pallets = 2,840 kg/1,000 = 2.840 x US $75.00 = US $213.00
Charge = US $75.00 x 2.840 = US $213.00
3. You have a weekly consolidation service Hong Kong – Vancouver, with direct
costs as follows:
From past experience your marketing department has determined that you need
to load 50 m3 of cargo into a 40-ft standard container, in order to quote your
clients an all-inclusive rate of US $58.00 per revenue ton.
As we are not given any weights we will have to base all our calculations
on the measure or volume of the freight. In other words, the m3.
a) Last week you only loaded 40 m3 in your container. What was your profit
or loss? Show your calculation.
c) This week you loaded 60 m3 in the container. What is your profit or loss?
Show your calculation.
Base your answer on the fact that sales and marketing has declared when
loading 50 m3 you can quote CAN $80.00 per revenue ton.
Total costs
Less ocean freight: US $1,385.00
Less loading (48 m3 x US $8.50) US $408.00
Less unloading (48 m3 x US $9.50) US $456.00
Total costs
Less ocean freight US $1,385.00
Less loading (60 m3 x US $8.50) US $510.00
Less unloading (60 m3 x US $9.50) US $570.00
3. Once you have presented a quotation to a client, what is the most important
thing to remember to do?
You should always follow-up with a phone call or visit.
5. What system should you employ to ensure that you invoice the client as per
quotation?
Open an operational file, make sure that all the details are filled in
correctly, and when in doubt ask the sales and pricing department for a
copy of the quote supplied to the client.
a)
We would like to thank you for this opportunity to quote on your air export to Paris,
France. Please note that we have based our final costing on the dimensions and weight
that you have provided.
Our quotation shows the breakdown for costing on a CPT CDG Paris, France costing.
Should there be any variation in the dimensions or weight of your shipment we will
prepare a revised quotation. This quotation is valid up to January 31, 2017.
We would appreciate your feedback and will be more than willing to answer any
questions you may have.
Jane Doe
b)
Destinations Curr. Min. +45 kg +100 kg +300 kg +500 kg +1,000 kg Fuel Security
Paris CAD NA NA 4.75/kg 4.40/kg NA NA 0.15/kg 0.08/kg
Remarks
1. Rates are subject to change with or without notice
2. Origin charges are to the account of the shipper
3. Weight/volume ratio : 6,000 cm3 or 366 in3 = 1 kg
4. Rates are subject to space and equipment availability
5. Rates do not include insurance, customs clearance, duties or taxes
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any amendments thereto)
which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to be bound by these conditions. Copies of the
conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
Origin pick up fee: CAN $0.20 x 400 = CAN $80.00 CAN $80.00
Origin handling fee: CAN $45.00 CAN $45.00
Origin terminal handling charges: CAN $0.04 x 400 = CAN $16.00 CAN $16.00
NavCan: CAN $0.07 x 400 = CAN $28.00 CAN $28.00
B13A Export Declaration: CAN $17.50 CAN $17.50
Air freight: CAN $4.40 x 400 CAN $1,760.00
Fuel: CAN $0.15 x 400 CAN $60.00
Security: CAN $0.08 x 400 CAN $32.00
a)
We would like to thank you for this opportunity to quote on your ocean export to Basel,
Switzerland. Please note that we have based our final costing on the dimensions and
weight that you have provided.
Our quotation shows the breakdown for costing on a CPT Basel, Switzerland basis.
Should there be any variation in the dimensions or weight of your shipment we will
prepare a revised quotation. This quotation is valid up to January 31, 2017.
We would appreciate your feedback and will be more than willing to answer any
questions you may have.
Jane Doe
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
TOTAL costing based on the following shipment:
ORIGIN CHARGES
Origin pick up fee CAN $150.00 based on the shipment $150.00
request
Origin handling fee CAN $60.00 per shipment $60.00
ACI fee CAN $30.00 per shipment $30.00
B13A Export CAN $17.50 per shipment $17.50
Declaration
OCEAN FREIGHT
CHARGES
Ocean freight USD $150.00 x 11.471 = $1,720.65 $1,755.06
FRC USD $17.00 x 11.471 = $195.00 $198.91
CAF USD $5.00 x 11.471 = $57.35 $58.50
DESTINATION
CHARGES
Destination handling CHF 50.00 per shipment $51.00
Terminal handling CHF 10 x 11.471 = 114.71 $117.00
Delivery CHF 150.00 based on the shipment $153.00
request
Customs CHF 75.00 flat fee $76.50
TOTAL $2,667.47
a)
We would like to take this opportunity to thank you for including us in your RFQ (request
for quotation).
Please find attached a detailed quotation that is valid until January 31, 2017. In order
to simplify the calculations we have shown each weight break separately and indicated
the total USD rate. Please keep in mind that confirmation of the actual rate is based
upon the weights and dimension we receive and any variation will directly affect the
rate.
If you have any questions or comments with respect to the above, please do not
hesitate to contact us.
Jane Doe
b)
Destinations Curr. Min. +45 kg +100 kg +300 kg +500 kg +1,000 kg Fuel Security
Toronto USD N/A N/A N/A N/A $5.00/kg $3.75/kg $0.20/kg $0.05/kg
Origin Charges:
Pick-up fee: US $0.10/kg or minimum US $50.00
Handling: US $45.00 per shipment
Terminal handling charges: US $0.04/kg or minimum US $10.00
Destination Charges:
Handling: CAN $45.00 per shipment
Terminal handling: CAN $0.08/kg or minimum CAN $45.00
Navcan fee: CAN $0.07/kg or minimum CAN $7.00
Delivery: CAN $0.30/kg or minimum CAN $50.00
Remarks
1. Rates are subject to change with or without notice
2. Origin charges are to the account of the shipper
3. Weight/volume ratio : 6,000 cm3 or 366 in3 = 1 kg
4. Rates are subject to space and equipment availability
5. Rates do not include insurance, customs clearance, duties or taxes
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to be bound
by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
c)
550 kg
1,000 kg
a)
We would like to take this opportunity to thank you for including us in your RFQ (request
for quotation). Attached, please find a detailed quotation that is valid until January 31,
2017.
In order to simplify the calculations, we have broken down each container costing and
provided the USD rate. Please keep in mind that upon receipt of the information on
actual dimensions and weight of you cargo we will be able to base our costing on your
exact shipment.
If you have any questions or comments with respect to the above, please do not
hesitate to contact us.
Jane Doe
Provisos:
1. Rates are subject to change with or without notice
2. Rates are subject to change of GRI, PSS, BAF & CAF as per steamship lines or the industry
3. Rates are subject to space & equipment availability
4. Rates are inclusive of current GRI & PSS
5. For LCL, 1 CBM = 1000 kgs, Minimum chargeable is 1 CBM
6. Rates do not include insurance, customs clearance, duties or taxes
All business is accepted by Canadian International Freight Forwarders and its affiliates subject to the Standard Trading Conditions of the Canadian International Freight Forwarders Association Inc. dated June 16, 2016 (and any
amendments thereto) which define and limit the obligations and liabilities of the freight forwarder. In engaging the services of Canadian International Freight Forwarders and/or its affiliates, the customer accepts and agrees to
be bound by these conditions. Copies of the conditions can be obtained on request from Canadian International Freight Forwarders or from the Secretary, Canadian International Freight Forwarders Association Inc.
20-ft STD
40-ft STD
40-ft HC
1. What ability sets the true international freight forwarder apart from carriers and
customs brokers?
2. What is the most important action a forwarder can take in choosing the correct
transportation alternative?
3. How do you keep informed about occurrences in foreign countries, which may
require that you look for an alternative?
4. What client needs must you identify, and take into account before deciding on
transportation alternatives?
5. Name the basic elements you must take into account when working out a possible
alternative?
6. Prior to offering an alternative to your client, and after assessing the information
that your client has provided, what “other” important element must you take into
account?
8. Your 40-ft container shipment from Toronto is booked with an ocean carrier that
has a rail interchange agreement with Canadian National Railway. The planned
routing is to rail the container to the Port of Montreal, then by ocean to Antwerp.
One day prior to the planned loading of the container, at the seller’s warehouse,
C.N.R. workers declare a strike, and walk-out, thereby halting all C.N.R. rail
traffic, coast to coast.
9. The port of Vancouver is closed because of a strike. Name two suitable ports which
are able to accommodate container vessels and should be considered as an
alternative.
10. You have regular ocean shipments to Frankfurt, Germany, which you usually
route through Bremerhaven, and then inland to Frankfurt. Suddenly, the
shipping lines have suspended service to Bremerhaven due to severe
congestion. What other ports are available as alternatives.
11. List advantages air freight has over ocean freight other than speed.
12. A customer has called and has indicated that they have a shipment to Madrid,
Spain. Madrid is an inland destination. What are two ports that you can use as
a gateway to Madrid?
13. What possible disadvantages are there when traffic intended for a Canadian
destination is routed through an American port?
14. When looking for an alternative for your client who thinks ocean freight
movements are too slow and air freight is too fast, what alternatives could you
offer your client? Why?
1. Is it more common to move containers from Eastern to Western Canada and vice
versa by rail than by truck? Give at least two reasons why.
2. You have to move 120 cartons by air from point A to point B. Gross weight is 600 kg,
volume 4.5 m3. Which of the two following alternatives would you choose?
a) You can move it under the general cargo rate at CAN $4.00/kg chargeable
weight.
b) You can load the cartons, at your own expense, into a ULD type LD3, for which
the cargo is CAN $2,000.00 lump sum up to 600 kg (pivot weight) and CAN
$2.50/kg for each kg chargeable weight over 600 kg.
3. What are the prime guideline when assessing any alternative for a client?
4. When looking only at alternative routes and modes of transportation, what must be
your foremost concerns?
5. Because of problems of routing traffic through U.S. ports, you have decided to route a
40-ft container of consolidation freight via Vancouver. The container contains 52 m3 of
freight, and weighs 11,400 kg, ex Taipei and is intended for the Toronto area. We have
two choices:
1. MLB Taipei-Toronto.
All-inclusive cost: US $3,100.00
Estimated transit time: 25 days.
b) What route would you choose? What might cause you to use the
other route instead?
2. You are moving 80 cartons from Montreal to London, U.K. by air. Total weight
is 500 kg and total volume 5.5 m3.
b) ULD with pivot weight of 600 kg for CAN $2,200.00 and CAN $2.00/kg
for each chargeable weight over 600 kg.
2. Your customer has called complaining that his freight must always wait until the
Sunday night flight from YUL to MXP. The customer has deemed that they must
have accessibility to daily flights as they are losing potential business.
You have inquired as to how the cargo is packaged. You have been able to
determine the following:
You have also determined that there are daily flights utilizing an A340 aircraft,
yet the Sunday flight utilizes a B767-300 Freighter. The maximum height for
the lower deck pallets is 64 inches. The daily A340 has no upper-deck capacity.
1. You have to move 120 cartons of spare parts by air from Calgary to Hong Kong.
Each carton weighs 9 kg and has dimensions of 46 cm x 30 cm x 30 cm. Based
on price, what is the least expensive alternative to offer your client?
a) You can move it under the General Cargo Rate at CAN $2.95/kg
chargeable weight.
b) You can load the cartons, at your own expense, into a ULD-type
LD3, for which the cargo is CAN $2,000.00 lump sum up to 600
kg (pivot weight) and CAN $2.50/kg for chargeable weight over
the pivot weight.
1. You have an urgent shipment of car engine parts from Montreal to Libreville,
Gabon. The shipment consists of 5 small crates with a chargeable weight of
828 kg. You have already identified two possible alternatives.
Alternative 1
Freight rates:
Montreal – JFK: express truck, CAN $14.50/100 lb.
JFK – LBV: +500 kg - US $10.08
Alternative 2
Freight rates:
YUL – CDG: +300 kg - CAN $3.26
CDG – LBV: +500 kg - EUR 6.83
1. Your regular customer has approached you asking for an ocean freight rate for
10 cartons of hand tools, from Calgary to Dusseldorf, Germany. The carton
dimensions are 18 in x 12 in x 12 in, and each carton weighs 6 kg. You have
been able to determine the following:
a) Ocean freight:
Pre-carriage: CFS Calgary – CFS Montreal: US $85.00/m3
(minimum 2 m3)
Ocean freight: CFS Montreal - CFS Dusseldorf: US $165.00/m3
(minimum US $275.00)
Transit time: 21 days
b) Air freight:
Terminal Calgary – Terminal Dusseldorf: minimum:
CAN $120.00
- 45 kg – CAN $9.80
+ 45 kg – CAN $8.08
+ 100 kg – CAN $4.00
Transit time: 4 business days
1. Your customer has approached you informing that they have 5 skids of widgets
to move from their regular supplier in Tokyo Japan, to a manufacturing facility
in Berlin, Germany. Each skid is 1.211 m3 and weighs 195 kg. Your customer
is concerned about price as well as transit time. You are able to determine the
following:
(1) LCL Ocean Freight: CFS Tokyo – CFS Berlin (over Hamburg). Rate at
US $115.00/m3
Scheduled transit time is 28 - 30 days from sailing Tokyo.
(3) Air Freight: Terminal NRT – Terminal TXL (Berlin). Rate at +100 kg –
YEN 1,472.00/kg. Scheduled transit time is 2-4 business days.
(4) Air Freight: Terminal YVR – Terminal TXL. Rate at + 100 kg – CAN
$4.54/kg. Scheduled transit time is 3-5 business days.
Determine the best option to offer your customer, with the given information.
Keep in mind their concern about price and transit time.
1. Your customer, Entropy Inc., in Toronto, has a large number of wankel engine
parts for a geo-thermal project in Murmansk, Russia. The company is operating
under a strict time line, as these were parts that were not ready at the time of
the initial shipment and the project is in jeopardy of being delayed and a penalty
clause may apply. Entropy Inc. has asked for your help, and advice!
Entropy Inc. has provided you with the following shipment information:
LCL Cargo
Sailing details:
Closing Toronto every Wednesday.
Scheduled sailings Halifax the following Monday.
Transit time to Helsinki approximately 19 days from sailing.
LCL cargo is transshipped in Gothenburg.
Allow 12 days for trucking to Murmansk (inclusive of 4 days to transfer cargo).
FCL Cargo
Sailing details:
Closing Toronto every Tuesday.
Scheduled sailings Montreal the following Thursday.
9 days transit to Bremerhaven, must allow an additional 1 day to transfer the
cargo.
Weekly sailings from Bremerhaven every Friday.
Transit time to Kotka approximately 6 days.
Allow 8 days for container delivery to Murmansk (inclusive of 1 day to transfer
cargo).
Air Cargo
Flight availability:
YYZ – SVO: 747 freighter every Sunday, capacity is not a problem.
SVO – MMK: one flight daily, A340 service, cargo allocation 1 – LD7 pallet per
flight.
APRIL
SUN MON TUE WED THURS FRI SAT
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4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30
MAY
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31
We recommend that you do this exercise after you have completed the Costing and
Quoting section of the program.
The following task is an excellent exercise to prepare for something you might like to call
a “worst case scenario”.
Whenever such a need or request arises it is the stowage calculation, which should be
number one on your agenda.
Do take your time when making a container stowage calculation. Do not rush, but think
carefully and proceed methodically. Remember drawings may be helpful.
Once you have completed the stowage calculations for all consignments in this exercise,
it is suggested that you double-check your approach, calculations and results for inherent
possible mistakes.
Remember the stowage calculation is so to speak the foundation of the house you are
building. When the foundation is built correctly it will support the superstructure of
container size and freight costing. Your next step is to proceed with the actual costing.
2. Costing
The secret of success in this kind of task is an orderly, systematic, legibly written
approach. The request for a clear and legibly written style is primarily for your own
benefit so your own messy figures columns and notes do not confuse you. Once
you have learned to master this approach, any task, no matter how complex or
dissimilar in its specific detail or circumstance, would represent little problem for
you.
For this exercise you need to prepare a separate spreadsheet just for the export
portion of the task.
Use one page, start with the long side (11") across the “top”, create a column for
both routes (Hong Kong and Rotterdam) side by side - listing for both routes all
the required costing elements step by step. Write down for each step or line of
your listing the exact required details of container size or volume in cubic metres,
applicable rates, name of currency and rate of exchange used and then list the
appropriate freight or charge per step in one uniform currency. Decide now
whether to use Canadian or U.S. Dollars, then simply total the listed freights or
charges in the currency chosen for a grand total in dollars. It is strongly
recommended to write down the listing of items in a descending order of their
natural occurrence in shipping, i.e., from point of origin step by step to point of
destination.
Once you have completed this export spreadsheet, you again must double check
for omissions, rates, currencies and extensions.
It is for your own benefit to prepare such spreadsheets legibly and in a clear
transparent style. You should prepare your spreadsheets in such a way so that
someone else - skilled in freight forwarding - but unfamiliar with the particular
case/shipment can follow your figures and calculations easily. This would be
necessary, for instance, in case you would be sick and someone else in your office
has to take over your file and finish your work.
For this exercise you need to prepare another separate spreadsheet just for the
import portion of the task. For the import shipments the required suitable layout of
the spreadsheet must be in a totally different format from the export shipment.
This import spreadsheet should have on one page, starting again with the long
side of the paper (11"), eight separate columns side by side for each of the four
required Canadian destinations, i.e., four columns for Rotterdam and four columns
for Hong Kong. Put these 8 columns to the right of the page leaving enough room
on the left side to list the proper details of costing. Again, list the various costs in
the order of occurrence as explained under 2b) for the export spreadsheet.
3. Shipping Timetable
Prepare two separate timetable working sheets. One for export, one for import. Use the
calendar page provided and determine the various schedule details explained in the
assignment. Again, prepare this timetable step by step by listing on the right side of the
page the ports or points of transit. Then show in the middle of the page opposite the
named ports or places the actual days of transit or duration of work for each segment.
Then identify on the left side of the page again for each segment the actual day of the
week. Make sure you allow properly for weekends, especially for transshipment work.
Then you add up the number of days in the middle of the page and the total will be the
total number of estimated days of transit.
You must, of course, prepare one shipping schedule for each of the two routings.
Transfer these total dates of transit to your spreadsheets, especially for import. Now you
should have on one spreadsheet both the time and cost factors and you make the
appropriate correct selection of the fastest route in accordance with the shipper's
instructions.
4. Quotation
In regard to this exercise, make a careful assessment in your own mind of the conditions
requested by the shipper. Do not simply consider throwing out everything you do not like
or items you may feel uncomfortable with.
Remember, for most segments you must rely on your subcontractors chosen by you
and/or other agents for their respective performance and their liability towards your client
and/or yourself. Therefore, for you to assess the standard of quality of your subcontractor
or your agents based on available information or usual experience is part of this process
of preparing a quotation.
You must also keep in mind you are required to earn your living as freight forwarder for
your employer. You must be able to secure business under competitive conditions and
still earn a reasonable dollar for your employer.
When trying to decide if you can and should accept shipper’s required conditions, you
must consider in your mind if you can reasonably either supply the conditions in part by
yourself or if you can arrange to meet the conditions with the help of others you choose
or if you can figure out a way to control the aspects the shipper requires. You do not
necessarily have to accept every single condition. It is obviously in your favour if you can
accept as many conditions as possible without undue risk. In this context it is important
for you to realize that you as freight forwarder can never control the sailing time of any
vessel. Therefore you should never promise any definite time/date of delivery at
destination. As forwarder you supply merely a schedule of sailings with estimated times
of arrival. Always add the little all-important word "about" when referring to a vessel arrival
date.
"Undue" is a big word. There is no business without risk and a business to be undertaken
must balance your expected gross profit with your risk or exposures along with your ability
to control conditions/circumstances.
Now make a calculation of your expected gross profit and consider your time you would
likely spend looking after this shipment.
Also try to assess the money value of any risk or condition you plan to accept. Once you
have these figures in front of you, then make a decision what kind of quotation you want
to make. Some of the choices in style of quotation available to you would be:
a) One lump sum amount including a fee.
b) Itemized costing plus a separate fee, i.e., items of costing marked up or not,
depending on your own decision.
There are no rules which style is best or right. Best is what you can successfully and
competitively sell to a client. Answers will differ for each personality and/or shipment.
In any quotation you do or as an imprint on your letterhead, you must clearly refer to the
fact that you (your employer) only works on the basis of Standard Trading Conditions, a
copy of which is in your textbook. In addition, you should clearly spell out which cost
items are not included and which specific conditions of the shipper you do not accept.
Outline of Quotation
Before you actually set out to compose the actual letter of quotation you will find it helpful
to prepare for your own guidance and clarification notes on an outline, which is another
working paper containing the essential elements you must cover in headline form. Do it
separately, of course, for export and import. The main points to be covered would be as
follows (for both):
The Cheap 'n' Cheerful Clothing Company in Toronto is a nationwide chain of inexpensive
but fashionable clothing stores. They have four major distribution centres: Vancouver,
Edmonton, Toronto and Montreal. The retail outlets’ cash registers automatically trigger
shipping orders at the distribution centres. Timely deliveries are crucial to this company,
which keeps inventories at a bare minimum.
In an effort to stay competitive, they have decided to set up a factory on the island of
Mahe in the Seychelles, where there are no taxes, plenty of cheap labour and the beaches
are the best in the world. Once the plant is set up, fabric will be shipped there for cutting
and sewing, and the finished product will be shipped to Canada.
The Seychelle Islands are in the Indian Ocean, north of Madagascar and east of Kenya.
There is a port at Victoria on Mahe Island and only two shipping lines serve this tiny island.
One is West Africa Lines, which serves Europe via the Suez Canal, and the other is West
Asia Lines, which serves the Far East. Both handle only 20-ft containers and break-bulk
cargo on a weekly basis. Seychelle Airlines is the only airline serving the island with
weekly flights to Bombay, India and Athens, Greece. Neither the air, nor ocean carriers
serve North America.
Access is possible only by re-loading and transshipping via Europe or Asia, through your
agents.
The Cheap 'n' Cheerful Clothing Co. (CCC for short), will be shipping an emergency
power generator, textile machinery and a start-up supply of textiles to set up their plant.
Their production manager has volunteered to move there for five years and will be
shipping his personal effects as well. You are invited to make a proposal on the export
movement, as well as the import traffic of finished garments. You should not work on the
basis of price alone, but must consider the customer's needs as well. The following
details the goods to be shipped to and from Mahe, as well as CCC's terms and conditions.
EXPORT
IMPORT
1) Please quote one lump sum rate in Canadian Dollars for the export shipment
Toronto/Mahe. Describe your routing. Cargo must arrive latest July 1, 2017.
2) Please quote your import rate and transit time from Port Victoria, Mahe to terminal
Vancouver, Edmonton, Toronto and Montreal in Canadian Dollars. Describe your
routing. Please note that total transit time from origin to destination must be the
shortest possible.
Sincerely,
Jane Brown
Traffic Manager, Cheap ‘n’ Cheerful Clothing Co.
Since there is no direct service to or from Mahe, you send a message to your agents in
Hong Kong and Rotterdam asking for trans-shipping costs. Following are the best rates
they quote you:
Following are the best intermodal ocean freight costs to/from Canada with the fastest
shipping line:
1. Give one day for transhipping operations (unloading and reloading) in both Hong
Kong and Rotterdam. Saturday/Sunday are not working days.
3. 1 m3 = 35.3146 ft3
1,728 in3 = 1 ft3
1. Make a container stowage calculation for items A-E and separately for item F
(import).
Result should determine the container size or type required and how many
containers for the export shipment, resp. import shipment.
3. Compare the cost of moving the shipments via Rotterdam and via Hong Kong.
Then compare the total transit times. Do not forget the time required to
unload/re-load at the transshipment port and take into account the connection
dates. Which route or combination of routes is ideal?
4. Now you are ready to make your quotation to CCC. Pay attention to all the
terms and conditions previously outlined. Do not forget to mention any of your
own terms and conditions on your offer. How much profit margin have you
included?
5. Which term(s) and condition should you NOT agree to? Why?
7. Assume that the shirt container is delayed at the transhipment port of Rotterdam
or Hong Kong due to shortage of vessel space.
(a) Whenever anything out of the ordinary happens, especially when you act
as an agent, what is really your first duty?
Hint: you find a reference to the required answer in the CIFFA STCs,
Article 5. You need not know clauses in the STCs, but the fundamental
principle of this clause you must know and always act upon.
(b) Express or calculate your liability in actual dollar terms based on the
CIFFA STCs.
8. Assuming that the shirt container is delayed at the transshipment port because
you forget to send handling instructions to your agent, what is your liability to
CCC under CIFFA STCs? How much does it work out to?
9. CCC needs an emergency shipment of 100 dozens shirts by air freight to their
Toronto distribution centre within a week. Your options are to airfreight via
Athens or via Bombay by Seychelle Airlines. TACT rate is US $4.00/kg of
chargeable weight and the route is Mahe/Athens/London/Toronto or
Mahe/Bombay/Los Angeles/Toronto. Transit time is 3-4 days either way.
However, you have a consolidation every three days from Hong Kong direct to
Toronto. TACT rate Mahe/Bombay/Hong Kong is US $1.00/kg chargeable
weight. Your cost from Hong Kong to Toronto is US $2.00/kg of chargeable
weight and you can get the shipment in six days.
How would you route this shipment? What will you charge CCC? What is your
profit?
MAY 2017
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JUNE 2017
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JULY 2017
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
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29 30 31
1. What ability sets the true international freight forwarder apart from carriers and
customs brokers?
A true international freight forwarder has the ability to think in
ALTERNATIVES. Sometimes freight forwarders are considered
“architects of transportation.”
2. What is the most important action a forwarder can take in choosing the correct
transportation alternative?
It is important that the international forwarder identifies the true needs of
the customer. This is achieved by asking the customer questions about
their freight, past, present and future requirements and business
demands.
3. How do you keep informed about occurrences in foreign countries, which may
require that you look for an alternative?
Through your foreign agent, the news media, Internet news agency or
CIFFA eBulletins.
4. What client needs must you identify, and take into account before deciding on
transportation alternatives?
a) The safety and security of the cargo.
b) Reasonable transportation costs.
c) Scheduled delivery of the cargo at destination.
5. Name the basic elements you must take into account when working out a
possible alternative?
Mode of transport;
Cost;
Time sensitivity;
Government restrictions;
Packaging;
The cargo itself;
Urgency of the shipment;
Value of goods;
Perishability of the goods;
Hazardous or non-hazardous cargo.
6. Prior to offering an alternative to your client, and after assessing the information
that your client has provided, what other important element must you take into
account?
You must always take into consideration what the client is willing to pay.
8. Your 40-ft container shipment from Toronto is booked with an ocean carrier that
has a rail interchange agreement with Canadian National Railway. The planned
routing is to rail the container to the port of Montreal, then by ocean to Antwerp.
One day prior to the planned loading of the container, at the seller’s warehouse,
C.N.R. workers declare a strike, and walk out, thereby halting all C.N.R. rail
traffic, coast to coast.
What alternative could you offer your customer?
Due to the close proximity of Toronto to Montreal, your best alternative
would be to truck the container from Toronto to Montreal. This is
generally done at an additional charge. You would first check with the
ocean carrier to determine that they are willing to do this. Should they
refuse to truck the container to Montreal, you may be required to use your
own drayage company to perform the trucking. Either way there will be
additional charges that you should discuss with your shipper and make
them aware of the labour situation and how you would propose to
overcome this unexpected event and additional charges.
9. The port of Vancouver is closed because of a strike. Name two suitable ports
which are able to accommodate container vessels and should be considered as
an alternative.
10. You have regular ocean shipments to Frankfurt, Germany, which you usually
route through Bremerhaven, and then inland to Frankfurt. Suddenly, the
shipping lines have suspended service to Bremerhaven due to severe
congestion. What other ports are available as alternatives.
11. List advantages air freight has over ocean freight, other than speed.
Can move goods with less costly packaging;
Perishable goods move quickly;
High-value goods can have security, if arranged;
Sensitive cargo can be moved with extra care;
Lower insurance premium;
Less chance of damage;
A low inventory is possible, in some cases, depending on the
location, it may be cheaper than other modes of transportation.
12. A customer has called and has indicated that they have a shipment to Madrid,
Spain. Madrid is an inland destination. What are two ports that you can use as
a gateway to Madrid?
Spain has two coasts. The Atlantic to the north, the Mediterranean to
the south. For example, ports that you might use might be Bilbao to the
north, Valencia to the south.
13. What possible disadvantages are there when traffic intended for a Canadian
destination is routed through an American port?
There is always the risk of a U.S. Customs inspection as well as delays
in transferring the cargo to the correct on-carrier.
14. When looking for an alternative for your client who thinks ocean freight
movements are too slow and air freight is too fast, what alternatives could you
offer your client? Why?
a) Sea – road.
b) Sea – air.
c) Air – road.
Any combination should offer a quicker transit time than exclusively sea,
however the costs will be more than sea alone and conversely, any
combination will be less costly than airfreight alone.
2. You have to move 120 cartons by air from point A to point B. Gross weight is
600 kg, volume 4.5 m3. Which of the two following alternatives would you
choose?
a) You can move it under the general cargo rate at CAN $4.00/kg chargeable
weight.
b) You can load the cartons, at your own expense, into a ULD type LD3, for
which the cargo is CAN $2,000.00 lump sum up to 600 kg (pivot weight)
and CAN $2.50/kg for each kg chargeable weight over 600 kg.
3. What are the prime guideline when assessing any alternative for a client?
How the cargo is packaged;
Is the cargo time sensitive or not; and
What the client is willing to pay.
2. You are moving 80 cartons from Montreal to London by air. Total weight is
500 kg and total volume 5.5 m3.
b) ULD with pivot weight of 600 kg for CAN $2,200.00 and CAN $2.00/kg
for chargeable weight over 600 kg.
Volume weight is greater than the actual weight, thus charges are based
on volume weight
Alternative a)
Alternative b)
ULD charges for first 600 kg = flat rate .................... CAN $2,200.00
Charges on next 317 kg = 317 kg x CAN $2.00 ........ CAN $634.00
All other factors being equal, you would move this cargo using the ULD
alternative.
How are these 60 cartons loaded onto the plastic pallet? There are 5
layers of 12 cartons. Each carton has a height of 12 in so the height of the
cargo is 60 in (which should fit into a lower deck pallet) but we must
include the height of the skid, which is 6 in, thus the unitized skid
dimensions become 48 in x 42 in x 66 in.
The present manner, in which the customer is unitizing their freight, can
only be handled with upper deck pallets.
The astute forwarder might recommend that they eliminate the top layer
of each unitized skid, create an extra skid, such that their cargo can load
into a lower deck pallet, which has daily capacity.
Ocean Freight
Air Freight
At this point, you could offer to your client that for about an extra CAN
$120.00 they can get their freight to the destination in 4 business days as
opposed to 21 days. This will no doubt be attractive to your client,
however, by declaring a higher chargeable weight of 100 kg to the airline
you are able to offer your client an air freight rate that will be less than the
ocean freight rate.
As you are an astute forwarder, you have reviewed the drawings provided,
and realize that by removing the front bucket, the Frobenius 165XL Grader
can be loaded into a 40-ft standard container. You should now determine
an alternative to offer your customer, and the associated cost.
We can offer our client that by removing the front bucket, the Grader can
load into a 1 x 40-ft container, and they could save approximately CAN
$6,278.00 in shipping charges.
Ocean freight:
Total volume = 1.211 m3 x 5 skids = 6.055 m3
Total weight = 195 kg x 5 skids = 975 kg
Air freight:
Total weight = 975 kg
Volume weight = 6.055 x 1,000,000 = 1,009.5 kg
6,000
3. Sea-air combination:
(ocean freight Tokyo – Vancouver) + (air freight YVR – TXL)
= CAN $524.97 + CAN $4,583.13 = CAN $5,108.10,
Transit time approx. 16 days.
As the client was concerned about price and transit time we are able to
present to the client a SEA-AIR combination, where the transit time is half
of a sea-only transit, at a price that is about 3 times less than an air-only
transit.
It is always best to present all these alternatives to the client and let them
decide as to how they wish to proceed. Recall, we must always be aware
of what the client is willing to pay.
1. First determine the anticipated time lines for our 3 ALTERNATIVES based
on the cargo being ready for pick-up on April 2, using the calendar
provided.
LCL Cargo
FCL Cargo
Air Cargo
LCL Cargo
FCL Cargo
Air Cargo
Air cargo charges will be rated on the actual cargo weight of 3,940 kg.
Moving the cargo as LCL freight, the cargo is handled many times en-
route. The cargo is: loaded onto a truck in Toronto, off loaded at the CFS
in Toronto, loaded into a container to Gothenburg, off-loaded from the
container in Gothenburg, loaded into a container to Helsinki, off-loaded
from the container in Helsinki, loaded onto a truck for Murmansk, off-
loaded at door Murmansk. Each pallet is handled at least 8 times during
the voyage.
1. Stowage Plan
You should decide that Generator A) must be loaded in 40-ft O/T
container by itself for balancing of weight and bracing, the stowage plan
for the rest is as follows:
W 84 in x 1 = 84 in
H 6 in x 12 = 72 in space left on top for 18 in
L 216 in x 1 = 216 in space left in length 16 in
= 12 tables W = 1,200 kg
Add fabric rolls both on top of tables in space left and in length in space
follows:
W 12 in x 7 = 84 in
H 12 in x 1 = 12 in now in total with table 84 in
L 45 in x 4 = 180 in
28 rolls W = 420 kg
14 rolls W = 210 kg
in L (W 12 in x 6 + H 14 in x 6 + L 15 in x 1)
L 45 in x 2 =90 in
Length 7 ft 6 in – 1,170 kg
A) Generator
B) Tables
Due to length of 18 ft = 1 x 20 ft
boxes
i.e. W 7 ft x 1 = 84 in
L 18 ft x 1 = 216 in
H 6 in x 12 = 72 in = 12 tables with L = 18 ft
First 1 x 20 ft
Total length taken = 19 ft
C) Sewing machines
cartons
W 12 in x 7 = 84 in
H 14 in x 6 = 84 in
L 15 in x 15 = 225 in = 18 ft 9 in
-------------------------------------------------- = 630 cartons only, balance of 54
cartons (see (D) below).
cartons
W 14 in x 6 = 84 in
H 15 in x 1 = 15 in on top of existing (P/E) 72 in = total 87 in H
L 12 in x 9 = 108 in = 9 ft = covers 54 cartons ex (C)
Add for (E) remaining rolls of fabric into the remaining length of 10 ft (78
rolls)
rolls
W 12 in x 7 = 84 in could hold 98 rolls but you only need 78 rolls
H 12 in x 7 = 84 in
L 45 in x 2 = 90 in
LISTING OF ft3 & TOTAL WEIGHT PER ITEM EXPORT Value CAN $
B) Tables
12 boxes 63 ft3 each 756 ft3 1,200 kg 2,000.00
C) Sewing machines
684 each 1.458 ft3 998 ft3 13,680 kg 342,000.00
E) Fabric
120 rolls each 3.75 ft3 450 ft3 1,800 kg 30,000.00
98.09 m3 27,680 kg
EXPORT SHIPPING SCHEDULE
VIA ROTTERDAM
B) If delayed in Rotterdam for 2nd, sailing on 7/6/17, ETA Mahe would be 28/6/17
and availability at plant. Choosing slg Toronto 15/5 offers therefore a little
safety margin
COSTING COMPARISON
(for freight charges only)
Route
Rotterdam due to lower overall cost, with at least 2 sailings with reshipping
opportunities.
Handling
Generator must be shipped in a separate open top container with weight evenly
distributed and generator braced.
It is important that any of your recommendations are consistent with the details of
your proposal to CCC.
IMPORT
The secret here is not to fit cartons by using the same width of cartons into the
width of the container but a mix of the sizes of 18 in and 24 in to best utilize the
given width of container of 90 in. The following samples will demonstrate this.
W = 18 in x 4 = 72 in
H = 24 in x 3 = 72 in = 108 cartons only - NO GOOD
L = 24 in x 9 = 216 in
You could add a fourth layer by reversing cartons meaning you now use 24 in as
width, 18 in as height, length remains 24 in.
Because now you still have a balance of 15 cartons “left 'over”, it does not make
sense to consider shipping such a small quantity separately as break-bulk.
You should also realize that 15 cartons only have a volume of 90 ft (2.548 m3) and
looking at the used space so far of 22.936 m3 it is fair to assume that there must be
another solution to stow the complete quantity of 150 cartons.
Now try using a mixed pattern of cartons, i.e. use some cartons with a width of 1 in
and then add to that width of 18 in other cartons using 24 in as width.
You only need 150 cartons. So when mixing different width it is possible to
improve the total quantity of cartons to be stowed.
QUOTATION/PRESENTATION TO CCC
By making a rough outline with all main points you wish to cover, you would find
it much easier to develop or draft from this outline a full letter text by simply
following your points in the right order.
Export
3) Decline liability for any set delivery time at a destination or for any delay
beyond your control as a freight forwarder.
4) Offer net cost in lump sum form as requested. Add a separate handling fee
of US $150.00 per container and all risk insurance premium.
Import
2) Decline liability for any fixed delivery time at a destination or for any delay
beyond your control as a freight forwarder.
3) Offer net cost in lump sum form as requested. Add a separate handling fee
of US $150.00 per container and all risk insurance premium.
Add standard trading clause, present tariffs, subject to change etc. without notice
(a reference to the STCs if printed on your letterhead, then no repetition in the text
of the quotation is necessary).
PROFIT IMPORT
PRESENTATION TO:
We thank you for your enquiry and submit the following explanation and
quotation to you. This presentation is in two parts:
There are no direct or any transhipment services on a through bill of lading either
to or from Mahe. Mahe is only served by a steamship line either from Rotterdam
or from Hong Kong offering only 20-ft containers as well as facilities for acceptance
of break-bulk shipments.
This means all cargoes must be transloaded from container arriving in Rotterdam
from Canada into 20-ft containers for Mahe. Your generator must be shipped break-
bulk due to its length of 21 ft.
The same situation of transloading applies to containers arriving in
Rotterdam/Hong Kong from Mahe for outgoing containers from Canada.
There are regular weekly sailings available from/to Toronto to/from Rotterdam or
Hong Kong and again there are weekly sailings from Rotterdam to Mahe or from
Mahe to Hong Kong.
Vancouver and Edmonton are best served with transshipment in Hong Kong
whereas Montreal/Toronto is better serviced with transshipment via Rotterdam.
Transit-Sailing-Times
The transit times are estimated only and are calculated on the basis of current
published sailing schedule dates of the steamship lines concerned.
At this point we must point out that we have, of course, no control over the sailing
time of vessels, delays, weather etc.. Therefore we cannot accept any liability to
deliver at destination at a specific date or within a given period of time.
We are only responsible for our own negligence and that of our agent (name) in
Rotterdam/Hong Kong, but we are not responsible for the action of any other sub-
contractor we may choose on your behalf.
Generator
There is one special area of handling to which we must draw your attention.
For your protection and safety of cargo during voyage, we judge it mandatory that
the generator is to be loaded by itself in a separate 40-ft O/T container to permit
even weight distribution over the total floor length of the container and allow
appropriate bracing inside the container to prevent the generator from moving.
Our freight calculation has therefore considered this aspect.
Freight Charges
Export
For the five items of cargo you specified we have pleasure in quoting you for one
shipment as requested in lump sum form from door Toronto to CPT Mahe with
transloading in Rotterdam.
CAN $14,005.00
We have calculated that with a separate 40-ft open top container for the generator,
we require in total 2 x 40-ft plus 1 x 20-ft containers to Rotterdam and 3 x 20-ft from
Rotterdam to Mahe, whereby the generator would be shipped from Rotterdam as
break-bulk.
Import
Your weekly shipments of 750 doz. shirts or 150 cartons can be loaded in 1 x 20
ft.
There is a lower rate of CAN $3,414.00 available for Edmonton via Rotterdam upon
request, but transit time would be 3 days longer than offered now. In addition we
propose an import handling and coordination fee of CAN $150.00 per container.
All risk insurance coverage is available at a rate of 0.25% of insured value. Insured
value is usually CIP value plus 10%. On that basis, your import insured value per
shipment of 20 ft would be
Canadian duty & taxes should be declared in addition for insurance purposes,
having a special premium of only 0.12%.
Above prices are based on today's rates and current conditions of transport with
carriers and organizations of our choice, and are subject to change with or without
notice.
We are very interested in handling this traffic for you, and we hope you find our
offer attractive and competitive.
From/in Rotterdam Hong Kong VAN EDM MON TOR VAN EDM MON TOR
1) Ocean freight US $500.00 US $1,000.00 700 700 700 700 1400 1400 1400 1400
from Mahe
2) Transhipment for 25.485 m3 @ US $20 714 714 714 714 714 714 714 714
per m3 in. US $509.70 US $509.70
Hong Kong
ETS Mahe Monday 13/5 Monday
ETA Hong Kong + 21 days 3/6 Monday
Transit Hong Kong 4/6 Tuesday
ETS Hong Kong Wednesday 5/6 Wednesday
ETA Vancouver +14 days 19/6 = 37 days Wed
ETA Edmonton +16 days 21/6 = 39 days Fri
ETA Toronto + 21 days 26/6 = 44 days Wed
ETA Montreal + 22 days 27/6 = 45 days Thurs
First 40 ft
Total 882 ft 21 ft
Second 40 ft
Total 1,668.5 ft 37 ft 9 in
Third 1 x 20 ft
Total 913.5 ft 19 ft
7. a) Your very first duty is to inform your client of this delay, especially
when you have declared yourself as an agent. You have an ongoing duty
to keep your client advised at all times.
Your motto to guide you should be the text based on clause 5 of the
Standard Trading Conditions.
informed the client. Without passing on the information you can be found
liable even as an agent.
8. The principle answer is that you are always responsible for the
consequences of your own negligence. However, your financial exposure
is limited by the terms of the STC. The STC contains two possibilities.
Let's figure out both possibilities for 1 x 20 ft shirts to Vancouver.
Comment
You can limit your liability in your offer to CCC, but in regard to delay, it
can only be any aspect beyond your control.
This means to repeat you are on the hook for your negligence and that of
your agent overseas.
a) 4 days
b) 6 days
You could use the route via the consolidation service you have from
Hong Kong and charge still full TACT rate US $4.00/kg. That's all right
for the exam only, in reality you always should reduce your rate if a
consolidation is involved compared to full TACT. How much is
discretionary.