CE International Shipping & Logistics Management 2 — Questions and Answers
Question 1: Which Incoterm requires the seller to deliver goods on board the vessel at the named port of shipment, with the buyer bearing all costs and risks from that point?
- FOB (Free On Board) (Correct answer)
- CIF (Cost, Insurance and Freight)
- DAP (Delivered at Place)
- EXW (Ex Works)
Correct answer: FOB (Free On Board)
Under FOB, the seller's responsibility ends once goods are loaded on board the vessel at the named port, and the buyer assumes all costs and risks thereafter.
Question 2: What document serves as both a receipt for cargo and a contract of carriage between a shipper and an ocean carrier?
- Commercial invoice
- Bill of lading (Correct answer)
- Packing list
- Certificate of origin
Correct answer: Bill of lading
A bill of lading serves as a receipt for goods, a contract of carriage, and a document of title in ocean freight shipments.
Question 3: A US exporter ships goods via air freight. Which organization's regulations govern the air waybill used for this shipment?
- International Maritime Organization (IMO)
- International Air Transport Association (IATA) (Correct answer)
- World Customs Organization (WCO)
- Federal Maritime Commission (FMC)
Correct answer: International Air Transport Association (IATA)
IATA establishes the standards for air waybills and governs the conditions of carriage for international air freight shipments.
Question 4: What is the primary purpose of a freight forwarder in an export transaction?
- To provide export financing to the exporter
- To insure cargo against loss or damage
- To arrange transportation and handle logistics on behalf of the exporter (Correct answer)
- To certify the origin of exported goods
Correct answer: To arrange transportation and handle logistics on behalf of the exporter
A freight forwarder acts as an agent for the exporter, coordinating transportation, preparing shipping documents, and managing logistics.
Question 5: Under a CIF Incoterm, which party is responsible for arranging and paying for marine cargo insurance?
- The buyer
- The carrier
- The seller (Correct answer)
- The freight forwarder
Correct answer: The seller
Under CIF (Cost, Insurance and Freight), the seller must procure and pay for minimum cargo insurance coverage to the named destination port.
Question 6: What is LCL shipping in the context of ocean freight?
- A shipment using a dedicated full container
- Cargo from multiple shippers consolidated into one container (Correct answer)
- A shipment transported via inland waterways only
- Air freight with less than full charter capacity
Correct answer: Cargo from multiple shippers consolidated into one container
LCL (Less than Container Load) means cargo from multiple shippers is consolidated into a single container, with each shipper paying for their portion of space.
Question 7: Which document provides detailed information about the contents, weight, and dimensions of each package in an export shipment?
- Shipper's export declaration
- Bill of lading
- Packing list (Correct answer)
- Pro forma invoice
Correct answer: Packing list
A packing list details the contents, quantity, weight, and dimensions of each package, helping customs and the consignee verify the shipment.
CE International Shipping & Logistics Management 2
Which Incoterm requires the seller to deliver goods on board the vessel at the named port of shipment, with the buyer bearing all costs and risks from that point?