Introduction

In this assignment you will have to answer questions for two different exporting companies named company A and company B, that are both situated in The Netherlands.

The questions concern transport documents, packaging, insurance, cost of freight, customs regulations and the rate of exchange.

Assignment information

Company A, situated in Rotterdam, exports 1000 mountain bikes to Oslo, Norway. This is the first time that Company A sells these goods to a client in Norway and there probably will be no other transaction in the near future.

The goods are being transported to Norway by ship.

The delivery term is C.I.F Oslo.

Each bike weights 5 kg, is 1.60 m. long, 1m. high and has a width of 0.30 m.

The invoice value is EURO 900.000,-.

According to the payment terms of the sales contract, the payment can take place in the currency of the importing country.

Company B, situated also in Rotterdam, also exports 1000 mountain bikes to St. Sebastian, Spain. This is the first time that Company B sells these goods to a client in Spain and there probably will be no other transaction in the near future.

The goods are being transported to Spain by ship.

The delivery term is C.I.F. St. Sebastian.

Each bike weights 5 kg, is 1.60 m. long, 1m. high and has a width of 0.30 m.

The invoice value is EURO 900.000,-.

According to the payment terms of the sales contract, the payment can take place in the currency of the country where the buyer is situated.

Introduction

This assignment “A4” is an assignment where I need to investigate certain things about the documents, packaging insurance costs, rate of exchange, customs and the monetary systems. The first thing needed to be investigated where the documents that are needed for the transport, how they work and what they were. I’m also going to investigate what the packaging factors where and what the insurance of the transportation are. I also have to describe the import duties and the V.A.T. besides that I had to investigate what the exchange rates were of Norway, the buying and selling rate. I had to apply those rates to the company.  I had to describe the monetary systems, what they are and what the differences are between them, besides that I also have to describe the trading barriers that has been changes by these two monetary systems.

Transport documents, packing and transport insurance

  1. Which transport document(s), issued by a carrier as evidence of a transport contract, will accompany the goods during transport?

In your answer you need to:

  1. Describe and discuss the transport modes that are available to transport goods i.e. road, rail, air, ship (inland waters and oceans), and additionally multi-modal transport and consolidation of goods in a container.

The transportation of goods can be done on many different ways, think of road, rail, air or sea transport for example. The choice of the certain type of transportation depends on the following points:

  1. The type of goods and the appropriate for a certain transport system.
  2. The kind of package of the goods.
  3. The accessibility of the destination and the speed of the transport method.
  4. The costs of the mode of transport.
  5. The delivery conditions.
  6. The national law rules.

On base of the certain points of above will the exporter choice his kind of transportation. He would like to transport the goods with the most possible low costs, with the less of risk and without unnecessary time loss.

He has to take charge of the kind of the package of the goods, for example if the goods are perishable, they will need to arrive to there destination soon. Break-bulk cargo desires another kind of transport than mass goods. Break-bulk cargo will be transported in packed units called a collo. For example a container; dry mass goods (for example oil products) will be transported earlier by ship than by train. There are also special forms of transport like the transport of goods by use of pipelines (oil and gas), cables (electricity) and data communication.

The distance of the destination of transport is determined for the choice of the method of transport. Some of the places aren’t accessible by ship, train or plane. Because there isn’t any harbour, train station or airport in that place. When there isn’t any harbour at the destination and the kind of goods are asking for sea transport they can go to the nearest harbour and from there with an truck to the place of destination. When the exporter has investigated all the factors, he could make a choice of transport on land, on water or through air.

Road transport

This is the most known and also most used transportation form. Most of the time they use trucks for road transport. For example in France there are weakly more than 5000 trucks on the road. In 1995 there was a total export to France of 23,1 million ton of goods, 39% of those where transported by road, after that came the inland waters with 27%.

Road transport has been separated in regular service and occasional service. The separate is in the Netherlands is fading away step by step, but it is possible to see it in the foreign countries.

Advantages of road transport are as follows:

- Flexible (the route can be changes during transport and almost every                                                                                                                    destination can be reached).

- No overcharge.

- Relative low package costs.

- Fast

- Suitable for many kinds of goods/ products.

The tariffs by road transport will be calculated on basis of the distance that has to be done, the weight of the goods and the kind of goods that has to be transported. National count maximum tariffs, but international there will be worked with bracket tariffs and with discount abilities. The costs of the transport are going down when the exporter takes a transport company underneath the arm that can arrange an return-freight. The costs of the return will be paid by the entrepreneur from who the return-freight is coming from.  

Disadvantages of road transport are as follows:

- Some countries are giving any a few licenses per year to cross their country.

- Per country the certain technical regulatory requirements where trucks need to meet the needs or conditions differ.

- Per country the social requirements will differ also, like the times when they are allowed to drive.

Rail transport

This kind of transport is thorough rail. There can be hired whole trains and also only wagons. It is also possible to place trucks or trailers on the wagons. This is called combined transport and is mostly used during transport of containers. Besides that there is also the transport called system transport. This is an transport form with an regular operating schedule.

Advantages of rail transport are as follows:

- Minor obstacles on the route.

- By par excellence (uitstek) proper for the transport of mass goods and dangerous substances.

- Milieu friendly.

- Energy efficient.

- Profitable on long continental traverse.

Disadvantages of rail transport are as follows:

- Minor flexible than road transport because the routes lie firm and not every destination can be reached.

- Minor fast than road transport.

- Defective transport.

Inland waters transport

This kind of transport is actually thorough canals and rivers. Inland ships transport mostly heavy materials and wet or dry mass goods. For the transport of other kind of goods they choice more often inland water transport, because the overload of the road-system.

When ships sail disorganized, there will be spoken of unscheduled transport, scheduled transport is called in inland waters regular barge service.

Advantages of inland water transport are as follows:

- There isn’t road tax.

- There are licenses needed.

- There aren’t any arrangements for the allowed capacity.

Disadvantage of inland water transport is as follows:

 - The range is limited, because not every place is next to the river or canal.

Sea transport

For transport by sea there are many different kind of ships being used. In normal conventional ships are different kind of cargos combines as one big cargo. In container ships will the cargo be transported in containers (this kind of transport is often cheaper than transport by conventional ships). In ro-ro ships (roll on/roll off) will trailers of trucks driven on board, this is so that by the arrival of the destination they can drive directly through. These ships are mostly used by ferry-services to England, Scandinavia and to countries that border on the Mediterranean sea. By sea transport are further more liner trades and tramp trades distinguished.

Advantages of sea transport are as follows:

- Suitable for big and small cargos.

- Very big cargos/ loads can be transported to the place of destination.

- Relative cheap.

- Suitable for big distances.

- Possible to transport containers from house to house.

Disadvantage of sea transport is as follows:

 - The transport goes relative slow.  

By sea transport are playing the conferences a big part. Liner trades ship companies that are united in a conference, hold on to established tariffs and sail schedules on their combined sea route. For the exporter it is offering him a guarantee and continuity and above all low tariffs. But the disadvantages are that he is in case that of tariffs or other problems he stands against a rigid organisation form, where the interests of the ship companies have priority.

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Ship companies that aren’t connected to a conference are called outsiders. However they sail often by regular schedules, they offer the exporter still less assurance about travel schedules and travel expenses. It can also come that an outsider disappears out of nothing, because of financial problems. In that case it is also possible that the cargo disappears. But some of those outsiders have build up a good reputation.

Calculation of cargo are based on the volume, weight and the value of the goods. If the volume is 1000 kg goods bigger than 1 cbm (cubic metre), than ...

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