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theCharacteristicofFuntionalStructures

1Transportationmodes

ModeTotalmodeCostperTransitAdvantagesDisadvantages

costpallet

time

Sea

Air

Rail

620

1265

1275

24.8

253

51

7daysCheapandSlowandhigh

largecapacityrisks

4hoursFastandExpensiveand

securefinitecapacity

2days

Fastandlarge

capacity

Lessflexibleand

needrailroad

Directroad135067.53daysBetterforSmallcapacity

shippedandandexpensive

convenient

Multi-mode1185

47.4

7days

18hours

Reduce

handing

cargo

Cost

ofinvestment

andhigh

of

is

quickertransit

times

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theCharacteristicofFuntionalStructures

Takeseaasanexample,becausetheshippingrequires25palletsandthetotalcostis620,thecostperpalletis620/25=24.8.Inthesimilarway,otherresultalsocanbecalculated,excepttheMulti-mode.TheMulti-mode’costis1185including125,620,295,and145,thusthecostperpalletis1185/25=47.4.

Airtransportationisoptimumchoice.Airtransportationcanusetheleasttimetoconveygoodsduetofasterspeed.Besides,italsoensuresthesecuritytoalargeextentrelatively.However,italsohassomedisadvantages.Airtransportationhasexpensivecost,andairportisdistantfrommunicipalcenter.

Seatransportationalsocanbechosen.Thoughitistheslowestmethodandvulnerabletobadweatherinocean,itisthelowestexpensesoffreightandcarriesthelargestquantities.

AngusGlenalsocanselectrail.Railhasalargecapacityandislessrefrainedbybadweather.Railhasthesedisadvantages,itisnotmuchflexibleandcannotworkwithoutrailroad.

2Consignmentdeliveryterm

Atradetermrequiringthesellertodelivergoodsnamed

airport,terminal,orotherplacewherecarrieroperates.Cost

losstransferbuyerandriskoflosstransfertothebuyerafter

delivertothecarriers.Thesellerfulfilshisobligationdeliver

whenhehashandedgoodsover,clearedforexport,intothe

chargeofthecarriernamednamedbythebuyeratthenamed

place.Whenusedtradeterms,word“free”meanssellerhasan

FCAFreeCarrier

(namedplaceof

delivery)

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theCharacteristicofFuntionalStructures

obediencetodelivergoodsnamedplacefortransfertocarrier

(,2016).

FOBFreeOnBoard

(namedportof

shipment)

atermininternationalcommerciallawspecifyingatwhat

pointthesellertransfersownershipofthegoodstothebuyer.

UndertheIncoterms2010standardpublishedbythe

InternationalChamberofCommerce,FOBisonlyusedin

non-containerizedseafreight,andalsodefinesownership

transfer.Theownerofthegoodsisresponsiblefordamageor

lossduringtransport,sothepointofownershiptransferis

important(,2016).

CIF

Cost,Insurance

&Freight

(namedportof

destination)

ThistermisbroadlysimilartotheaboveCFRterm,withthe

exceptionthatthesellerisrequiredtoobtaininsuranceforthe

goodswhileintransittothenamedportofdestination.CIF

requiresthesellertoinsurethegoodsfor110%oftheirvalue

underatleasttheminimu)mcoveroftheInstituteCargo

ClausesoftheInstituteofLondonUnderwriters,oranysimilar

setofclauses.Thepolicyshouldbeinthesamecurrencyasthe

contract.CIFcanbeusedbyanytransportbyseaandairnot

limitedtocontainerizedornon-containerizedcargoand

includesallchargesuptotheport/terminalofentrance.CIP

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theCharacteristicofFuntionalStructures

coversadditionalchargesattheport/terminalof

entrance(,2016).

CPTCarriagePaidto

(namedplaceof

destination)

Thesellerpaysforthecarriageofthegoodsuptothenamed

placeofdestination.However,thegoodsareconsideredtobe

deliveredwhenthegoodshavebeenhandedovertothefirst

ormaincarrier,sothattherisktransferstobuyerupon

handinggoodsovertothatcarrierattheplaceofshipmentin

thecountryofExport.Thesellerisresponsiblefororigincosts

includingexportclearanceandfreightcostsforcarriagetothe

namedplaceofdestination.Ifthebuyerrequiresthesellerto

obtaininsurance,theIncotermCIPshouldbeconsidered

instead(,2016).

CIPCarriageand

InsurancePaid

to(namedplace

ofdestination)

CIPrequiresthesellertoinsurethegoodsfor110%ofthe

contractvalueunderatleasttheminimumcoverofthe

InstituteCargoClausesoftheInstituteofLondonUnderwriters

oranysimilarsetofclauses.Thepolicyshouldbeinthesame

currencyasthecontract,andshouldallowthebuyer,the

seller,andanyoneelsewithaninsurableinterestinthegoods

tobeabletomakeaclaim.

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theCharacteristicofFuntionalStructures

CIPcanbeusedforallmodesoftransport,whereasthe

IncotermCIFshouldonlybeusedfornon-containerised

seafreight(,2016).

DATDeliveredAt

Terminal

(named

terminalatport

orplaceof

destination)http

s://en.wikipedi

/w/index.

php?title=Incot

erms&action=e

dit§ion=8

ThisIncotermrequiresthatthesellerdeliversthegoods,

unloaded,atthenamedterminal.Thesellercoversallthe

costsoftransport(exportfees,carriage,unloadingfrommain

carrieratdestinationportanddestinationportcharges)and

assumesallriskuntilarrivalatthedestinationportor

terminal.

TheterminalcanbeaPort,Airport,orinlandfreight

interchange,butmustbeafacilitywiththecapabilityto

receivetheshipment.

Allchargesafterunloadingaretobebornebybuyer.However,

itisimportanttonotethatanydelayordemurragechargesat

theterminalwillgenerallybefortheseller's

account(,2016).

DeliveredAt

DAP

UnderDAPterms,theriskpassesfromsellertobuyerfromthe

Place(named

pointofdestinationmentionedinthecontractofdelivery.

placeof

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theCharacteristicofFuntionalStructures

destination)

Oncegoodsarereadyforshipment,thenecessarypackingis

carriedoutbythesellerathisowncost,sothatthegoods

reachtheirfinaldestinationsafely.Allnecessarylegal

formalitiesintheexportingcountryarecompletedbythe

sellerathisowncostandrisktoclearthegoodsfor

export(,2016).

DDPDeliveredDuty

Paid(namedplaceofdestination)

Sellerisresponsiblefordeliveringthegoodstothenamed

placeinthecountryofthebuyer,andpaysallcostsinbringing

thegoodstothedestinationincludingimportdutiesandtaxes.

Thesellerisnotresponsibleforunloading.Thistermisoften

usedinplaceofthenon-IncotermFreeInStore.Thisterm

placesthemaximumobligationsonthesellerandminimum

obligationsonthebuyer.Noriskorresponsibilityistransferred

tothebuyeruntildeliveryofthegoodsatthenamedplaceof

destination(,2016).

Export-Carria

geto

Custom

portofs

Carriage(S

ea

Freight/Ai

rFreight)

Unloadi

ng

charges

inport

Carriag

eto

place

of

Loadin

gon

truck

inport

Import

custom

s

clearan

Loadin

g

charge

sin

Unload

ingof

truck

inport

Incote

rm

2010

Import

taxes

Insura

nce

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theCharacteristicofFuntionalStructures

EXW

FCA

FOB

CPT

CIF

CIP

DAT

DAP

DDP

declara

tion

Buyer

Seller

Seller

Seller

Seller

Seller

Seller

Seller

Seller

export

Buyer

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Seller

Seller

Seller

of

export

Buyer

Buyer

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Seller

Seller

portof

export

Buyer

Buyer

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toport

import

Buyer

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ofof

import

Buyer

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of

import

Buyer

Buyer

Buyer

Seller

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destina

tion

Buyer

Buyer

Buyer

Seller

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ce

Buyer

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Seller

Forincoterms’importance,itcanensurethattransactionsarefinishedsuccessfullyandsafely.Bynegotiating,sellers

andbuyerscansigncontractcontainingrightanddutyandotherpertinentitem.Italsoexplicitlyshowstheprice

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theCharacteristicofFuntionalStructures

andcostbetweenbuyersandsellers.Ingeneral,buyersshouldpaycost,freightandinsurance.Itisgoodforsolvingconflict.Intheend,incotermsisbeneficialforrelevantagenciestocarryoutoperationalactivities

3Consolidationandgroupagearrangement

Less-than-containerload(LCL)isashipmentthatisnot

largeenoughtofillastandardcargocontainer.The

abbreviationLCLformerlyappliedtolessthancarloadfor

quantitiesofmaterialfromdifferentshippersorfor

deliverytodifferentdestinationscarriedinasinglerailway

carforefficiency.LCLfreightwasoftensortedand

redistributedintodifferentrailwaycarsatintermediate

railwayterminalsenroutetothefinaldestination.(Henry,

RobertSelph(1942))

LCLis"aquantityofcargolessthanthatrequiredforthe

applicationofacarloadrate.Aquantityofcargolessthan

thatfillsthevisibleorratedcapacityofaninter-modal

container.Itcanalsobedefinedasaconsignmentofcargo

whichisinefficienttofillashippingcontainer.Itisgrouped

withotherconsignmentsforthesamedestinationina

containeratacontainerfreightstation.[2]

Consolidation

PeopletakeaboveGroupage’scontainerstosame

warehousetopreservetogether.Then,carryingthemto

Groupage

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theCharacteristicofFuntionalStructures

differentboataccordingtothesecontainer’sdestination,

forexample,thereare5containersand2boat.If2

containers’destinationistheU.S,theywillbecarriedonA

boat.Ifanother3containersistoUK,theywillbecarriedon

Bboat.

CircumstanceswhentheyThegroupageoftenisnormallyusedbythesea,railand

couldbeuseddirectroad.Itsnumberisnotlargeandthegoodshaveno

rigoroustimerequirements.

Consolidationisfitforairtransportationandcarries

necessities,thuswhensomeemergencieshappensor

transportationneedlesstime,theconsolidationwillbe

used.Itacknowledgesthegeneralproductsinsteadofthe

exceptionalproducts

CosteffectivepalletloadBythepart1,thechoiceisdirectroadwhosecostis1350

levelandtoperpalletis108soresultis1350/108=12.5.

Bycalculating,theresultis12.5,so,whentheloadisequaltoorbiggerthan12.5pallets,thedirectroadmodeiseffective.However,accordingtomethod,theresultshouldberoundedtothenearestinteger,thustheresultis13finally.

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theCharacteristicofFuntionalStructures

4Leasttotalcost

RouteA

Mode

Cost

KirriemuirtoCoatbridgeRoad145+28=173pounds

CoatbridgetoSouthamptonRail315+15+12*2+24.5+55=

433.5pounds

SouthamptontoPortdeSea

montrealCanada

1880+24.5+34=

1938.5pounds

PortdemontrealCanadatoRoad

EcosseHotel

420+2*18+32=

488pounds

Hirecost

Insurance

Totalcost

32*6=192pounds

80*(1+10%)=88pounds

3313pounds

RouteB

Mode

Cost

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theCharacteristicofFuntionalStructures

KirriemuirtoTillburyRoad

505+32+6*15=627pounds

TillburytoPortdemontrealSea

2010+24.5+34=2068.5

Canada

pounds

PortdemontrealCanadatoRoad

EcosseHotel

420+2*18+32=488pounds

Hirecost

23*6=138pounds

Insurance

80pounds

Totalcost

3401.5pounds

Mode

Route

Leasttotalcost

Byabove

A

RoadRailSeaRoad

3313pounds

chart,RouteA--Kirriemuir

BottlingPlanttoCoatbridgeRailporttoSouthamptonContainerTerminaltoPortdeMontrealCanadatoEcosseHotelisoptimumchoice.BecausethecostofRouteAislowerthanRouteB.

5Proceduresanddocumentationtable

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theCharacteristicofFuntionalStructures

Area

Procedure

Documentation

Transportation

Foremost,companyselectsInsurancelist

freightforwarderandsign

contractandconveythe

goodsfromUKtotheportof

exports.Then,company

loadsgoodsafterchecking.

Next,thepurchaserlets

bearertohelpconveythe

goods.Then,conveying

themtoCanada.Next,the

purchasersemptytheship.

Then,thepurchaserconve