Ocean Sea Freight Ocean and Sea Freight Forwarding 4 — Questions and Answers
Question 1: What is the 'Shipper's Export Declaration' (SED) / Electronic Export Information (EEI) used for?
- To declare the value of imported goods to customs
- To report export shipment data to the Census Bureau for statistical and export control purposes (Correct answer)
- To request a refund on import duties
- To notify the ocean carrier of cargo contents
Correct answer: To report export shipment data to the Census Bureau for statistical and export control purposes
The EEI (formerly SED) is filed via AES (Automated Export System) and is required for US exports over $2,500 per schedule B code or requiring an export license.
Question 2: What is the purpose of a 'Letter of Indemnity' (LOI) in ocean shipping?
- To guarantee payment of ocean freight charges
- To allow cargo release without original Bills of Lading, with a financial guarantee (Correct answer)
- To certify the quality of exported goods
- To replace the packing list when cargo is damaged
Correct answer: To allow cargo release without original Bills of Lading, with a financial guarantee
An LOI is a guarantee document provided to the carrier to release cargo without the original B/L, indemnifying the carrier against any loss arising from early release.
Question 3: What does 'Ro-Ro' (Roll-on/Roll-off) describe in ocean freight?
- A method of rolling containers onto a vessel using cranes
- A vessel type where wheeled cargo drives on and off under its own power (Correct answer)
- A rotating loading schedule at container terminals
- A rotation system for booking ocean freight space
Correct answer: A vessel type where wheeled cargo drives on and off under its own power
Ro-Ro vessels are designed for wheeled cargo such as cars, trucks, and heavy machinery, which drive on and off the ship via a ramp.
Question 4: A US importer receives an ocean shipment from China. Which US government agency primarily regulates the import entry process?
- FDA
- CBP (Customs and Border Protection) (Correct answer)
- FMC (Federal Maritime Commission)
- USDA
Correct answer: CBP (Customs and Border Protection)
US Customs and Border Protection (CBP) is the primary agency responsible for processing import entries and enforcing import regulations.
Question 5: What is the 'Carrier's Hague-Visby Rules' liability limit per package in international ocean shipping?
- $500 USD per package
- 666.67 SDR per package or 2 SDR per kg, whichever is higher (Correct answer)
- $10,000 per container
- No limit under Hague-Visby Rules
Correct answer: 666.67 SDR per package or 2 SDR per kg, whichever is higher
Under the Hague-Visby Rules, carrier liability is limited to 666.67 SDR per package or 2 SDR per kg of gross weight lost or damaged, whichever is higher.
Question 6: What is 'free time' in ocean freight container terminology?
- The period when ocean carriers offer discounted rates
- The number of days a shipper can keep a container at the terminal without incurring demurrage or detention fees (Correct answer)
- The period between booking and vessel departure
- Time allocated for customs examination
Correct answer: The number of days a shipper can keep a container at the terminal without incurring demurrage or detention fees
Free time is the number of days granted to the shipper or consignee to pick up (or return) a container before demurrage or detention charges begin.
Question 7: Which document certifies the country where goods were manufactured, often required by customs at destination?
- Commercial Invoice
- Bill of Lading
- Certificate of Origin (Correct answer)
- Packing List
Correct answer: Certificate of Origin
The Certificate of Origin (CO) certifies where goods were manufactured and is used to determine applicable duty rates and trade agreement eligibility.
Ocean Sea Freight Ocean and Sea Freight Forwarding 4
What is the 'Shipper's Export Declaration' (SED) / Electronic Export Information (EEI) used for?