1. Chapter 9 Delivery of Goods Nancy Tu

2. Introductions The delivery of the goods means that the seller delivers the contract goods at the agreed time, place and in the agreed manners to the buyer. The delivery of the goods means that the seller delivers the contract goods at the agreed time, place and in the agreed manners to the buyer. In international sales of goods, the delivery also means to transfer the necessary documents at the stipulated time to the buyer. In international sales of goods, the delivery also means to transfer the necessary documents at the stipulated time to the buyer.

3. Section One Methods of Delivery Common methods are: ocean transport, railway transport, land bridge transport and International multimode transport and so on. Common methods are: ocean transport, railway transport, land bridge transport and International multimode transport and so on. The buyer and seller can decide which method will be the best for goods to be transported according to goods ’ characteristics, quantity, transit journey, value, time, the natural conditions and so on. The buyer and seller can decide which method will be the best for goods to be transported according to goods ’ characteristics, quantity, transit journey, value, time, the natural conditions and so on.

4. Ocean Transport Ocean transport is the most widely used form of transportation in international trade as well as the most efficient form in terms of energy. Ocean transport is the most widely used form of transportation in international trade as well as the most efficient form in terms of energy. It ’ s relatively cheap but slow and usually suffers perils of the sea. It ’ s relatively cheap but slow and usually suffers perils of the sea. Two types of ocean transport: Two types of ocean transport: chartering chartering liner ( book shipping space ) liner ( book shipping space )

5. Shipping by Chartering Types of charter Types of charter Voyage charter Voyage charter Time charter Time charter Demise charter Demise charter Charter Party: a contract between the ship-owner and the charterer. Charter Party: a contract between the ship-owner and the charterer. freight of chartering (lien) freight of chartering (lien) loading and unloading expenses loading and unloading expenses time of loading and unloading ( demurrage, dispatch money) time of loading and unloading ( demurrage, dispatch money)

6. Liner / regular shipping liner A liner is a vessel with regular sailing and arrival on a stated schedule between a group of specific ports. A liner is a vessel with regular sailing and arrival on a stated schedule between a group of specific ports. The main features of liners: The main features of liners: regular line regular line lease part of shipping space lease part of shipping space responsible for loading and unloading responsible for loading and unloading B/L as the shipping contract B/L as the shipping contract

7. Freight of liners: remuneration payable to the carrier. Freight of liners: remuneration payable to the carrier. Freight = Basic freight + ∑Surcharge Freight = Basic freight + ∑Surcharge standards for calculating freight: standards for calculating freight: gross weight / WEIGHT TON(WT) gross weight / WEIGHT TON(WT) volume / MEASUREMENT (M) volume / MEASUREMENT (M) value / Ad Valorem (A.V.) value / Ad Valorem (A.V.) W/M W/M W/M or A.V. W/M or A.V. W/M plus A.V. W/M plus A.V. number of the goods number of the goods temporary or special agreement temporary or special agreement

8. The way to calculate the freight The way to calculate the freight find out the freight standard or grade find out the freight standard or grade find out basic freight rate and surcharges find out basic freight rate and surcharges Freight Per Freight Ton = the basic freight rate + ∑rate of surcharge Freight Per Freight Ton = the basic freight rate + ∑rate of surcharge Total freight amount = the freight ton of the goods X freight per freight ton Total freight amount = the freight ton of the goods X freight per freight ton Case analysis: A Chinese company exports a batch of canned fruit juice 100 cases to Iran. Each case measures 40cmX30cmX20cm, gross weight 30kg. What is the total freight of this batch? Case analysis: A Chinese company exports a batch of canned fruit juice 100 cases to Iran. Each case measures 40cmX30cmX20cm, gross weight 30kg. What is the total freight of this batch?

9. Steps of analyzing of the freight of fruit juice 1. Find the name of the commodity “ fruit juice ”. 2. Check the classification of commodities and find the above goods belong to grade 8, M/W. 3. Check the freight from China to Iran in the scale of class rates of China service ( 航线等 级费率表 ) and find out the basic rate RMB222 per freight ton. 4. BAF: Bunker Surcharge 10% 5. Calculate the total freight:

10. Calculation Gross Weight: W 0.03X100 = 3 (metric ton) Measurement: M 0.4X0.3X0.2X100 = 2.4 (CBM) W>M : calculate according to W. Total freight: Freight Per Freight Ton = the basic freight rate + ∑rate of surcharge Total freight amount = the freight ton of the goods X freight per freight ton TF= 222 X 3 X (1+10%) = 732.6 (RMB)

11. Other Modes of Transport Railway Transport Railway Transport Air Transport Air Transport Postal Transport Postal Transport International Combined Transport / International Multimodal Transport International Combined Transport / International Multimodal Transport Container Transport: freight per container X number of containers Container Transport: freight per container X number of containers Land Bridge Transport Land Bridge Transport Pipelines Transport Pipelines Transport

12. Container Transport The use of container provides a highly efficient form for transport by ship, by road, by rail and by air, though its fullest benefits are felt in shipping, where costs may be reduced by as much as a half. The use of container provides a highly efficient form for transport by ship, by road, by rail and by air, though its fullest benefits are felt in shipping, where costs may be reduced by as much as a half. Type 1A(8 inches X 8 inches X 40 inches) Type 1A(8 inches X 8 inches X 40 inches) Type 1C(8 inches X 8 inches X 20 inches) Type 1C(8 inches X 8 inches X 20 inches) Type 1AA(8 inches X 8.6 inches X 40 inches) Type 1AA(8 inches X 8.6 inches X 40 inches) FCL & LCL FCL & LCL

13. Freight calculation for container shipping Usually, the effective weight a 20 ’ container can carry is 17.5 M/T (25CBM for effective volume). Usually, the effective weight a 20 ’ container can carry is 17.5 M/T (25CBM for effective volume). For 40 ’ container, they are 24.5 M/T and 55 CBM For 40 ’ container, they are 24.5 M/T and 55 CBM Total freight = freight per container X number of containers Total freight = freight per container X number of containers e.g. Freight from Shanghai to Felixstowe (Europe) is USD3500 per 40 ’ container.

14. Section Two: Delivery Conditions Time of Delivery Time of Delivery definite time definite time during a fixed period during a fixed period within … days within … days in the near future in the near future Port of Shipment and Port of Destination Port of Shipment and Port of Destination Partial Shipment and Transshipment Partial Shipment and Transshipment Shipping Advice: read P173 Shipping Advice: read P173

15. Section Three: Shipping Documents Commercial Invoice & Pro forma Invoice Commercial Invoice & Pro forma Invoice Bill of Lading Bill of Lading Multimodal transport document (MTD) Multimodal transport document (MTD) Packing List Packing List Weight Memo Weight Memo Inspection Certificate Inspection Certificate

16. Commercial Invoice & Pro forma Invoice Definition of Commercial Invoice Definition of Commercial Invoice Contents of the Commercial Invoice Contents of the Commercial Invoice Functions of the Commercial Invoice Functions of the Commercial Invoice Illustrations of a Commercial Invoice Illustrations of a Commercial Invoice Format of a Commercial Invoice Format of a Commercial Invoice Pro forma Invoice Pro forma Invoice

17. Bill of Lading Functions of Bill of Lading Functions of Bill of Lading Contents of Bill of Lading Contents of Bill of Lading Use of Bill of Lading Use of Bill of Lading Classification of Bill of Lading Classification of Bill of Lading

18. About B/L : Case 某出口商收到国外某银行的信用证, 信用证条款要 求提交 “ clean on board ocean bills of lading full set and 2 nonnegotiable copies ” 。出口商交单时只提交复印 件。银行审单无误后寄开证行索汇。开证行收到 单据后，提出了不符点： We have found the discrepancies on the terms of the credit:2 photocopies of the original bill of lading presented I/O 2 non- negotiable copies. 由于上述不符点，货款虽然经进 口商和出口商协商最后收回，但出口商付出了一 定的代价。 某出口商收到国外某银行的信用证, 信用证条款要 求提交 “ clean on board ocean bills of lading full set and 2 nonnegotiable copies ” 。出口商交单时只提交复印 件。银行审单无误后寄开证行索汇。开证行收到 单据后，提出了不符点： We have found the discrepancies on the terms of the credit:2 photocopies of the original bill of lading presented I/O 2 non- negotiable copies. 由于上述不符点，货款虽然经进 口商和出口商协商最后收回，但出口商付出了一 定的代价。 思考： 为什么会有上述不符？应吸取什么教训？ 思考： 为什么会有上述不符？应吸取什么教训？ analysis

19. Analysis NON-NEGOTIABLE B/L 不是指复印件， 是指 船公司印刷格式的那种，又区别于 ORIGINAL 的 提单， 是附于正本提单的副本。 FULL SET OF BILLS OF LADING 指三份正本提单， ONE COPY OF NON-NEGOTIABLE B/L 指，不议付 的提单副本。 船公司提单表格有两种的， 一种是 有印有 ORIGINAL 在上面（正本，做提货， 银行 议付凭证，运输合同凭证作用），一种是印有 NON-NEGOTIABLE( 副本，做存根，备查资料存 档用）。 NON-NEGOTIABLE B/L 不是指复印件， 是指 船公司印刷格式的那种，又区别于 ORIGINAL 的 提单， 是附于正本提单的副本。 FULL SET OF BILLS OF LADING 指三份正本提单， ONE COPY OF NON-NEGOTIABLE B/L 指，不议付 的提单副本。 船公司提单表格有两种的， 一种是 有印有 ORIGINAL 在上面（正本，做提货， 银行 议付凭证，运输合同凭证作用），一种是印有 NON-NEGOTIABLE( 副本，做存根，备查资料存 档用）。 不同的运输单据有不同的作用，业务人员应了解 和掌握各种不同运输方式下的运输单据的作用， 慎重选择运输单据的类型，以防范风险，避免不 必要的损失。 不同的运输单据有不同的作用，业务人员应了解 和掌握各种不同运输方式下的运输单据的作用， 慎重选择运输单据的类型，以防范风险，避免不 必要的损失。

20. Homework Review chapter 9 Review chapter 9 Do exercises: P270 ~P276. Do exercises: P270 ~P276. Group Work: Calculation 1: Group Work: Calculation 1: Our export consignment: 100 cases, 30cmX60cmX50cm, gross weight 40kg per case, freight grade 9, standard W/M, basic freight 109USD per freight ton, BAF 20%, Port Congestion surcharge 20%, currency adjustment factor 10%. Calculate the total freight. (1471.5 USD) Our export consignment: 100 cases, 30cmX60cmX50cm, gross weight 40kg per case, freight grade 9, standard W/M, basic freight 109USD per freight ton, BAF 20%, Port Congestion surcharge 20%, currency adjustment factor 10%. Calculate the total freight. (1471.5 USD)

21. Group Work: Calculation 2: Group Work: Calculation 2: We export washing powder 100 cartons to Dubai. 100 bags per carton, 0.5 kg per bag. Size of a carton: 47cmX30cmX20cm. basic freight per measurement ton HK$367; BAF 33%, port surcharge 5%, transshipment surcharge 15%, standard: M. We export washing powder 100 cartons to Dubai. 100 bags per carton, 0.5 kg per bag. Size of a carton: 47cmX30cmX20cm. basic freight per measurement ton HK$367; BAF 33%, port surcharge 5%, transshipment surcharge 15%, standard: M. Calculate the total freight. (HK$1583.46) Calculate the total freight. (HK$1583.46)