Business Studies Paper on The export of the Advanced PAK 610
The CIP (Carriage and insurance paid), exceptionally requires that the seller obtains insurance for the goods while still in transit. To be specific, the insurance should be 110% of the contract value. Therefore, I will insure the goods against risks that may occur before delivery. Here, the buyer becomes responsible for the goods once the seller passes them to the first carrier. This therefore means that you will have to be responsible for the laminating machine once it is past to the next carrier in port Hamburg. In case you wish to have more protection on the goods then agreements concerning the same will be made. It should be otherwise noted that these agreements will incur extra costs on the buyer. Generally, the seller pays the carriage and insurance to the port of destination, Hamburg, shifting risks to the buyer.
The general cost of the Advanced PAK machine; 200,000 euros; 110% of 200,000= 220,000; The CIP therefore becomes 220,000 euros.
CFR (Cost and Freight). Here, the seller must pay the costs of bringing the goods to the port of destination. The buyer becomes the bearer of risks when the goods are loaded into the ship. These become personal arrangements of the seller to the payments of cost, freight. Documents necessary to obtain the goods from the carrier will be provided. This means that once the goods arrive at the firm located at 118/142 phan Huy Ich Street, ward 15, Tan Binh District, Ho Chi Minh City, the buyer will be responsible for the risks thereafter. However, the buyer is not responsible in case the goods get damaged from the port of transportation.
The cost to securely pack the FCL container; 9000 euros, this the relative insurance cost. The freight cost is 7000 euros, CFA 3% of 7000=210 euros; BFA 90 Euros =7300 Euros. In order to insure the cargo for loss or damage during transport, then: Damage during transit; 1% of 220,000=2200 Euros. So, the total cost freight cost is (9000 + 7300 + 2000) = 18300 euros. This value assumes the whole cost of the transit insurance.
DDP on the other hand refers to Delivery Duty Paid (…named place of destination). This states that the seller has the responsibility of delivering the goods to the buyer, once cleared for import. The goods should however not be unloaded from any arriving means of transport at the named place of destination. In any case, the seller becomes the sole bearer of all the costs and risks involved in delivering the goods, where applicable for the import in the port of destination. DPP has the effect of leaving maximum obligations and therefore the license must be obtained by the seller. Along the same lines, in any case the seller is to be excluded from the binding obligations, then specific statements regarding that should be included in the contract of sale. Here, the Advanced PAK 610 paper laminating machine has been insured against risks during transit.
The freight cost; 7300, The cost of possible damage during transit; 1% of 220000=2200 euros; The packaging cost for the machine is 9000 euros. In totality, the amount dedicated to cover losses and risks is 18300 euros. The machine will therefore be delivered successfully according to the terms.