Exercise 1: Answer the questions

1. What are some of the advantages and disadvantages of air transport?

Some advantages of air transport are that it has high travelling speed, high speed
delivery, cheap insurance and world-wide transport operations.
Some disadvantages of air transport are transshipment to other forms of transport
essential, restrictions on weight and size, inflexible timetabling, delays due to bad
weather and high freight rates.
2. Why do some buyers prefer FOB terms?
Some people prefer FOB terms because they will be active about right of transport,
they have option of cargo and insurance schedule, they can handle the transport
themselves or of instructing an agent to arrange things on their behalf to deliver the
goods on time.
3. Discuss the transport options open to importers in your country.
Transport options open to importers in Vietnam: in terms, EXW, FOB, FAS, FCA,
CFR, CIF, CPT, CIP, DAT, DAP, DDP; in mode: air, sea, road, rail, postal services,...
Exercise 2: Which mode of transport?
Some major factors to consider:
NATURE OF THE GOODS

DIMENSIONS FRAGILITY
Bulk/shape/limits for air, road and rail Special packing. Special stowage
WEIGHT PERISHABILITY
Lifting gear available? Refrigerated ships/containers or
Limits for air speed

VALUE PILFERABILITY
Higher valued can be charged ‘ad Secure packaging. Few intermediate
valorem’ handlings.

THE TIME FACTOR

Fast transport often: - reduces distribution costs

- reduces cost of finance tied up in transit
- requires less insurance cover
- Means earlier use/resale of goods
 FREIGHT RATES

Sea Freight Rates:

a) Liner Rates (Scheduled services)

- According to weight or - more expensive than sea freight

measurement
- Set rates for commodities moved
regularly
- stowage factor - weight/bulk
- ad valorem – especially for high
value cargoes
- possible surcharges e.g.
Fuel/currency
b) Charter Rates - Usually negotiated
- charged by weight up to a certain
volume
- educed rates , newspapers, periodicals
- surcharge for valuable cargo
- 2 types of rating for aircraft ULDs
(Unit Loading Devices)

1)Voyage charter (contract per voyage)

2) Time charter (contract for period of time)

What mode of transport would be appropriate for each cargo listed below. Discuss its
characteristics, how urgently it might be required and whether the cost might be higher/
lower by sea or air. Give as many reasons as you can.
Give Reasons for your decisions using: because, as, due to the fact that; since (used
like 'because')
Make Deductions about what might be or could be the situation.
Use conditional questions and statements - using 'if' or 'unless'
 CARGO
Regular deliveries of 10,000t Sea
scrap metal
(Darwin to Kobe)
2500 day -old chicks
(Antwerp to Algiers)
50 air-conditioning units
(Milan to New Delhi)
Materials for training course
(London to Maputo)
1200t beef
(Auckland to Nairobi)
3 diesel locomotives
(Marseilles to Gabon)
2 kg platinum
(London to Riyadh)
Comparing Notes
Once your lists are complete, report and quote your own 's decisions and discuss the
reasons you gave.
Transport Reasons
mode
In Darwin has Darwin port (sea port)
and in Kobe has Kobe Port (sea port)
Weigh of the order is large
air Chicks is a lively animal so it needs
to deliver quickly.
Sea Because the goods have low valued.
Air Because the marterials must have go
with people.
Sea Because the large quantity and need
to protect in cool condition.
Train Because all Marseiles and Garbon
are in French. And in French, it is
common to transport by train.
air Expensive, valueable.
 E. Extension activities
You have been asked by your Chief of Department to write a report on up-to-date
ways of transporting different types of cargo, either a)by sea or b) by air, with particular
reference to your own country’s imports. In your report you are expected to make some
recommendations for possible ways of speeding up unloading and on-carrying
procedures. Use the information in the chart as a guide.
Some notes to help you:
Opening paragraph The purpose of this report is to examine
….. with reference to cargoes coming by
sea/air.
Background - Existing situation. Main categories
of transported goods…
- Transported in bulk
- General cargo (unitized/ non-
unitized)
- Existing facilities
Recommendations - Eg. Improvements to handling
equipment/ speed of unloading/
transshipment.
Background to Recommendations - Reasons for recommendations.
Limitations of present system, etc.
Action - What could be done as a first step.