(Tiểu luận) transport and insurance topic 10

MINISTRY OF EDUCATION AND TRAININGUNIVERSITY OF ECONOMICS & FINANCE

HO CHI MINH CITY

Lecturer: Ms Nguyen Tran Le

March 2024, Ho Chi Minh City

No.Full Name% contribution to

the overall result Evalution of the results Task

TABLE OF CONTENT

I Introduction 3

II Detailed Content 3

1 What is transportation? 3

2 What is cargo insurance? 4

3 What is sea freight? 4

4 Common types of documents .5

III Assignment of set of document in practices 17

1 Name each type of document and arrange it in order of issuance (by time) (2 points) 17

2 Does this type of goods need insurance? Why and why not? Are there any special documents accompanying the goods? What is the purpose of that document? (If any) (1 point) 17

3 Fill in the following information: Buyer, seller, forwarder, carrier/shipping lines, goods, weight, payment method, Incoterms conditions, loading port, discharge port (2 points) 18

4 Who pays the loading and discharge costs, and who pays the main freight? Explain (1 pt) 18

5 What type of B/L? Explain (1 point) 19

6 Draw the delivery process for this shipment with all participating parties in section 3 (2 pts) 19

7 Is there any difference between the learned theory and the actual evidence? (1 pt) 19

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I Introduction

Transportation represents an economic endeavor aimed at relocating goods and passengers between different points It holds a distinctive status as a sector of material production As Marx once articulated, "Beyond mining, agriculture, and manufacturing, there exists a fourth realm of material production, which evolves through handicrafts,

manufacturing, and mechanics This encompasses transportation, encompassing both passenger and cargo conveyance."

"The transportation industry stands as a pivotal technical facet within the national economy It caters to the transportation requisites of the entire socio-economic framework while significantly contributing to domestic output and national revenue Transportation assumes a critical role in the process of distribution and circulation In likening the economy to a living organism, with transportation serving as its circulatory system, transportation acts as the mechanism for delivering vital nutrients to nourish the body's cells This chapter will delineate definitions, features, and the pivotal roles of transportation activities within the national economy, alongside the intimate, intrinsic linkages between transportation and foreign trade."

The objective of this report is to enhance comprehension and assimilation of marine transport insurance, along with exploring practical applications of this knowledge in real-world scenarios.

1 What is transportation?

Transport is the process of applying force to objects to move something from one location to another Transport is associated with the daily needs of human living and production.

First, transport is often associated with the activities of porting, carrying, carrying, lifting of man in primitive society Later, when the economic form became more complex, the forms of transport were increasingly improved and diversified And over time, mere transport now gradually formed transportation services.

Cargo insurance is a contract to protect shippers from being

compensated for losses if goods are lost or damaged due to risks or ship accidents occurring during delivery (these risks are specified in the

insurance contract).

Sea freight insurance is concluded through agreements and terms of exchange agreed between the shipper and the shipping company.

3 What is sea freight?

Sea transport or sea transport is a form of transporting goods through the use of sea facilities and infrastructure to serve transportation activities Depending on the route, type of cargo, means of transportation are boats and means of loading and disassembling goods such as crane trucks Infrastructure to serve sea transport includes seaports,

transshipment ports

Sea transport is suitable for international or domestic trade

shipments in areas near the sea and adjacent areas where ships dock Because shipping vessels are often large in size and tonnage, usually sea transport is widely applied to the import and export industry to carry large quantities of goods.

Vietnam is a country with a long coastline, so the form of sea transport is very developed and strongly invested by the State in facilities, facilities and infrastructure systems Thereby promoting trade activities, export - import of domestic goods, a premise to help logistics services in the country develop strongly.

4 Common types of documents What is Incoterms?

Incoterms, which stands for International Commerce Terms, are a set of rules in global trade that outline what each party is responsible for in international contracts These standardized terms are widely used and recognized across many countries and territories worldwide The main points of these terms can be summarized into two key aspects:

Defining the responsibilities of both the buyer and seller Determining when and where responsibilities, costs, and risks shift from the seller to the buyer.

Incoterms help clarify who is responsible for what throughout the process of transporting goods internationally This includes aspects such as insurance, customs procedures, transportation costs, and dealing with any loss or damage to the goods Additionally, Incoterms specify the exact time and location of goods delivery, which helps reduce misunderstandings and disagreements in international trade This is especially important in diverse legal and commercial environments where different parties may operate under varying rules and regulations.

In the context of international trade, invoices, also referred to as bills, play a pivotal role in the exchange of goods Particularly within the domain of import and export activities, the sales invoice is crafted by the seller according to their own template, diverging from standardized forms provided by tax authorities or governmental bodies—a departure from the practice in domestic transactions Noteworthy details, including the invoice number, date, seller, buyer, goods description, quantity, unit

price, and total amount, must be clearly outlined on this document Its significance lies in facilitating payment processing, tax reporting, and customs procedures.

invoice and the Commercial Invoice In the initiation of international trade contracts, both parties embark on negotiations to establish pricing terms Upon reaching an agreement, the seller issues a price quotation through a Proforma invoice, furnishing the buyer with an initial estimate of shipment costs This provisional invoice, sometimes termed a

preliminary invoice, lacks payment validity and remains subject to amendments owing to its tentative nature.

Upon mutual consent on pricing, parties proceed to formalize a foreign trade contract, culminating in the delivery of goods by the seller to the buyer Subsequently, the seller seeks remittance from the buyer, necessitating the issuance of a Commercial Invoice—an authoritative document carrying payment value This invoice serves as the cornerstone for tax authorities and customs entities to ascertain invoice values for tax declaration and electronic customs clearance processes.

A Packing List, or goods packaging document, provides a detailed description of the shipment intended for import or export All information contained within the list allows the buyer to ascertain what items have been sold by the seller, their quantities, facilitating quick and easy cross-referencing and verification.

Based on the information provided in the Packing List, the buyer can estimate various parameters such as:

Appropriate means of transportation for the goods Necessary storage space for the goods.

Methods for loading and unloading the goods to prevent damage or breakage, whether through the use of machinery or manual labor.

Anticipated duration for loading and unloading of the goods By anticipating these details, the buyer can optimize costs and streamline the inspection process, while the seller enhances their

credibility and the perceived quality of their products Once the seller has completed packaging the goods, they will send the packing list to the buyer, enabling the buyer to thoroughly inspect the goods before

accepting delivery.

A Bill Of Lading is an essential document for transporting goods overseas across various international maritime regions Acting as both a receipt and a contract, a bill of lading serves as the primary invoice for the shipper It is a legally binding document that establishes obligations between both the shipper and the carrier.

The Customs Declaration Form is a document where the cargo owner (exporter) or the vehicle owner must provide comprehensive details about the shipment when exporting goods from the territory of Vietnam.

When a business intends to export a certain item, filling out the customs declaration form is one of the mandatory steps to be taken Failure to submit the customs declaration form will result in the halt of al export-related activities.

Before allowing registration of the customs declaration form, the system will automatically check the list of businesses that do not meet the requirements for registration (businesses with overdue debts

exceeding 90 days, businesses temporarily suspended, dissolved, bankrupt, etc.).

If the business is on the aforementioned list, it will not be allowed to register the customs declaration form, and the system will notify the declarant accordingly.

A Classification Certificate, understood as an essential document in the maritime industry, is issued by a ship classification society This document confirms that the vessel meets technical standards and

important safety requirements set forth by these organizations.

A ship classification society is an independent organization

authorized by maritime authorities to carry out tasks related to inspecting, evaluating, and ranking ships These organizations assess technical standards, design, construction quality, equipment, and safety of vessels, ensuring compliance with international regulations and standards.

The Classification Certificate typically remains valid for a certain period and requires regular updates to ensure that the vessel consistently meets the latest technical and safety standards This document is a crucial part of the registration and shipping process and is required for vessels to participate in international voyages.

Cargo insurance for import and export is a type of insurance provided by insurance companies to protect goods transported across borders, by sea, and by air This insurance covers risks such as loss, damage, or destruction of goods during transportation.

The significance of import and export cargo insurance lies in ensuring the safety of goods during transportation Shipping goods across borders and different regions may involve various risks such as collisions, loss, damage due to weather conditions, or even traffic

accidents Import and export cargo insurance will provide compensation for losses in the event of such incidents.

This helps minimize risks for businesses and exporters, ensuring that goods are transported safely and on time Furthermore, import and export cargo insurance helps enhance competitiveness for businesses and narrow the gap with competitors in the international market.

Cargo insurance is highly important in international trade.

Businesses need cargo insurance to minimize risks during import and export processes Cargo can be insured under risk policies or profit policies Cargo can include any description, such as merchandise, goods, assets, and so on.

Cargo insurance can reduce financial risks, expedite the release of your goods, is contractually required, provides insurance for the carrier's limited liability, and allows you to have more control over insurance terms.

III Assignment of set of document in practices

Answer the following questions: 1 Name each type of document and arrange it in order of issuance (by time) (2 points)

a Invoice (invoice, recording information about the value of goods and payment terms)

b Packing list (detailed list of items packed in the shipment) c Ocean bill of lading (an important document confirming the

carriage of goods)

d Declaration of exported goods (customs clearance) (needs to be filled out and submitted to the customs office for customs clearance of exported goods)

e List of goods eligible for customs supervision (needs to be prepared and confirmed before the goods are exported) f Confirmation of registration of the exporting ship (for the

carriage of goods by sea, this form is required to confirm information about the exporting vessel)

g Insurance policy (if applicable, is a document confirming the insurance for goods during transportation)

2 Does this type of goods need insurance? Why and why not? Are there any special documents accompanying the goods? What is the purpose of that document? (If any) (1 point)

- This type of goods requires large commodity value insurance - Type of goods: sproket ensures the Protection of Enterprise Assets by protecting them from loss, damage, fire and traffic accidents.

( insurance documents )

3 Fill in the following information: Buyer, seller, forwarder, carrier/shipping lines, goods, weight, payment method, Incoterms conditions, loading port, discharge port (2 points)

Buyer : UTSUNOMIYA INDUSTRY JAPAN CO.,LTD SELLER : UTSUNOMIYA INDUSTRY VIETNAM CO.,LTD FORWARDER : MP CONSOL CO.,LTD

Carrier/shipping lines : INTERASIA LINE LTD

VESSEL : INTERASIA PURSUIT NO52 (Interasia shipping company)

Goods : Sproket

Weight : 2cases/632000GW(kgs) Payment method : MA

Incoterms Conditions : DAP Loading port : HOCHIMINH CITY Discharge port : TOKYO, JAPAN

4 Who pays the loading and discharge costs, and who pays the main freight? Explain (1 pt)

- Who pays the loading fee: UTSUNOMIYA INDUSTRY VIETNAM CO.,LTD

- Who pays the main shipping fee : UTSUNOMIYA INDUSTRY JAPAN CO.,LTD

Policy Regulations: The terms and conditions of an insurance policy usually specify that the policyholder is responsible for the specific costs associated with transporting the goods, including loading and unloading costs.

Risk management: By being responsible for loading and unloading costs, policyholders also often have the status of risk managers during transportation This means they are

responsible for protecting their cargo, including paying the cost of safe and efficient loading and unloading operations.

Universality: In many cases, the fact that the policyholder is responsible for paying loading and unloading costs is an inevitable part of the freight process and risk management associated with this.

However, this may vary depending on the specific terms of the insurance contract and the agreement between the parties involved To better understand the responsibilities and costs in insurance transport, it is necessary to consult the insurance contract and seek expert advice 5 What type of B/L? Explain (1 point)

The type of B/L: House B/L

6 Draw the delivery process for this shipment with all participating parties in section 3 (2 pts)

Document rotation process in sea import and export