PSHI II International Maritime College Used of Cost Insurance & Freight Paper 6 pages excluded refrences Format of the report Font type: Times New Roman Fo

PSHI II International Maritime College Used of Cost Insurance & Freight Paper 6 pages excluded refrences Format of the report Font type: Times New Roman Font size: 12 Spacing: Single Spacing Paragraph: Justify left and right side Submission document: Microsoft Word ONLY Discussion report (40 MARKS)
INCOTERMS are one of most important features of international trade. These terms are intended to
clearly communicate tasks, costs and risks associated with the transportation and delivery of goods.
Task:
You have 4 different Scenarios, read them carefully. You are encouraged to answer them clearly and
elaborate on them with statements and discussions. The final assessment, which is a marked assignment
for Shipping, has to be submitted
Note: A plagiarized work will earn a 0. Please write in your own words and your own discussion
Part 1 (10 marks)
A seller of marble stone, based in Nizwa, has a sales agreement with a buyer in Izmir, Turkey. The buyer
wants the seller to procure marine and transport insurance. The buyer also wants the seller to clear the
goods and pay the import duties. The cargo will be shipped in 40’ft containers. The buyer has suggested
to use Incoterms® 2010 CIF, Izmir.
1. Discuss the challenges arising from the use of CIF, Izmir, for this particular shipment
2. Based on the requirements of the buyer, suggest which Incoterms® 2010 should be used. Explain
with reasons.
Part 2 (12 marks)
The marble is sold EXW for $20 per m3. 60m3 has been loaded in each of 10 x 40’ft container. The
following costs are made in order to have the cargo delivered at destination:
Pre- carriage from Nizwa to the Port of Sohar:
Export clearance:
Terminal Handling charges origin
Seafreight:
Terminal handling charges destination:
On-carriage from Port of Izmir to destination:
Insurance cost:
Customs clearance:
omr 200/20’
omr 35/40’
omr 75/teu’
usd 1,500/40’
usd 150/40’
usd 175/40’
5‰ of the EXW value
5% of the CIF value
Based on above information, determine the landing costs that will be offered by seller if the
Incoterm is:
(Note: all calculations based on USD-$)
a. DPU, Izmi
b. DDP, Izmir Warehouse buyer
c. FCA, Port of Sohar OICT Terminal
d. Select any of the Incoterms above and discuss the risks, obligation and costs for the
selected Incoterm.
Part 3 (10 marks)
‘Company AYZ manufactures large Pipes at its production site in China and sells them to a customer in
Oman. The buyer and seller have agreed “CPT Duqm Incoterms 2010” as delivery conditions. The
(Diploma in Logistics and Transport Management, LM) – Year 2 – Final Assessment – PSHI II.II – AY 2019 – 2020) Page | 1
company employs a service provider to transport the tanks to Oman. During transportation the tanks are
damaged and the customer refuses to accept them. He demands the delivery of new tanks.’
DISCUSSION QUESTION: Is responsibility for the damage to the tanks to be borne by the buyer or
seller? Can the buyer refuse to pay for the goods or is he bound to pay the sale price despite the damage?
Has the seller discharged his obligation to deliver the goods? Discuss all these questions in a short
paragraph
Part 4 (8 marks)
Corporation XYZ, a company based in Jeddah, is exporting goods to their customer in Southampton, The
United Kingdom. This shipment will be a parcel shipment consisting of four cartons, to be shipped by a
courier service. The British customer wants Corporation XYZ to use their own appointed courier and have
agreed to clear for import and pay VAT as long as Corporation XYZ clears export out of the Saudi Arabia.
The customer would like Corporation XYZ to arrange transport from their warehouse, directly to their
warehouse in Southampton.
What INCOTERM should be used? Defend your answer with evidence and clarification
Additional guidelines for English:
1. Your discussion paper must be type writing
2. Write your full name, your ID, Class section in front page.
3. Write your discussion clearly and professionally.
Format of the report
Font type: Times New Roman
Font size: 12
Spacing: Single Spacing
Paragraph: Justify left and right side
Submission document: Microsoft Word ONLY
Avoid any cheating/copying that may result in an instant failing of the final assessment.
-End of Questions & Good Luck-
(Diploma in Logistics and Transport Management, LM) – Year 2 – Final Assessment – PSHI II.II – AY 2019 – 2020) Page | 1

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