INTL 222-704

Course Code:
Course Name: Global Logistics

Module 5: Activity: Application of Incoterms®

1. If goods are being delivered under C terms (e.g. CIF Port of London England
(Incoterms 2020©)) where does delivery take place?
Buyer

2. A delivery from Toronto to an inland point in France includes the following charges:

 Inland (at both ends) $200.00 per container

 Local delivery (at both ends) $250.00 per container
 Main carriage $4,000.00

How much must be paid by the buyer under “C” Terms?

$4450.00

3. A seller in Montreal is shipping to the Port of Rotterdam and has a contract for main
carriage of $3,000.00 per container. The buyer has a contract for $5,000.00 per
container. Which Group (E, F, C, D) should be used?

Group C

4. Under D terms “foreign port”, who is responsible for the inbound local delivery (on
carriage) to the customer, the seller or buyer?

Seller

5. Under F terms the main risk for loss or damage is:

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a. Assumed by the carrier

b. Assumed by the seller
c. *Assumed by the buyer
d. Shared by the seller and buyer

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6. If goods are being delivered under FOB, how does the buyer know delivery
happened on time and the goods are undamaged?
Delivery can be tracking by bill of lading.

7. Use the chart below to determine costs to the seller and buyer under E, D, F, C
Terms.

From the factory Local delivery by small truck $150

to the distribution terminal
From the terminal Inland by rail $2000
to the port
From the port overseas Main carriage by marine vessel $6300
to the foreign port
From foreign port to Inland by truck $95
terminal in foreign city
From terminal in foreign city Local delivery by truck $50
to customer
Total Costs

Seller Buyer
EXW Terms $0.00 $8595.00

DAP Terms $8595.00 $0.00

FOB Terms $ 2150.00 $6445.00

CIP Terms $ 8545.00 +insurance $145.00

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SHIPMENT A SHIPMENT B
Origin: Shipper’s Plant Sherbrooke, Quebec Taipei, Taiwan
Terminal & customs Quebec City, Quebec Taipei, Taiwan
Port – seller’s side Halifax, NS Kaohsiung, Taiwan
Port - buyer’s side Le Havre, France Vancouver, B.C.
Terminal & customs Paris, France Victoria, B.C.
Destination: Buyer’s warehouse Lyons, France Nanaimo, B.C.

8. Use Shipment A (above) to illustrate CIF. Label the diagram (below) with the
locations and shade the seller’s responsibilities.

Sherbrooke, Quebec , Halifax, Le Havre, Paris, Lyons,

Quebec II France
Quebec NS France France
↓ ↓ ↓ II ↓ ↓ ↓
C T C
I (Seller’s Obligation min cargo cover)
R R

What is the full current Incoterm®?

CIF, Le Havre, France, Incoterm® 2020

What is unusual about this term?

Risk and responsibility transfers at different places.
Seller must purchase minimum coverage for the buyer.

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9. Use Shipment B (above) to illustrate FCA terminal. Label the diagram (below) with
the locations and shade the seller’s responsibilities.

Taipei, Kaohsiung, Vancouver Victoria, Nanaimo,

Taipei, Taiwan , B.C.
Taiwan II B.C. B.C.
Taiwan

↓ ↓ ↓ II ↓ ↓ ↓
C T C
I
(Seller, No
obligation)
R R

What is the full current Incoterm®?

FCA Taipei, Taiwan (Incoterm® 2020)

Why is this term great for a buyer of dangerous goods?

Dangerous Goods declaration is provided by the buyer.
The terms such as FOB or FAS, where we are responsible for the export clearance and
have more visibility of the export transportation. This can give better chances of spotting
something, not in line with the sales contract.

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