INCOTERMS 2020 QUIZ
Juliana del Pilar Chancafe Incio
Victor Rodrigo Saenz Paucar
Paula Xiomara Reategui Torres
PLEASE ANSWER THE FOLLOWING QUESTIONS:
1. Explain the differences and similarities between the following
incoterms:
FOB & CFR
SIMILARITIES DIFFERENCES
In both cases, the seller takes care of the In the case of FOB, the buyer has the
product until the time of loading on board responsibility of the Carriage (Sea Freight /
of origin. Air Freight) to port of import and Unloading
charges in port of import.
In the case of CFR, the seller has the
responsibility of the Carriage (Sea Freight /
Air Freight) to port of import and Unloading
charges in port of import.
CFR & CIF
SIMILARITIES DIFFERENCES
The importer has to deliver the goods at the In the case of the CFR, the buyer has the
port specified by the importer responsibility of hiring the insurance and
loading on truck in port of import.
In the case of the CIF, the seller is
responsible for hiring the insurance and
loading on truck in port of import.
The exporter pays the Freight
DPU & DDP
SIMILARITIES DIFFERENCES
In the case of the buyer’s responsibility, In the case of DDP, the seller has the
licenses and authorizations are the same responsibility for handling costs at port /
for both DPU & DDP. airport, export customs formalities, and
internal transport; the buyer has the
responsibility for unloading the truck or
emptying the container.
In the case of DPU, the seller and the buyer
have the responsibility for handling costs at
port / airport, and internal transport according
to the agreed place of delivery; the seller has
the responsibility for unloading the truck or
emptying the container; the buyer has the
responsibility for export customs formalities.
2. You receive an export order with the Incoterm CIF New York Airport.
How would you respond? Would you recommend another incoterm?
I would try to negotiate in order to use another incoterm because CIF has the
responsibility for the seller that is hiring the international transport and insurance,
it is an order by plane and that is expensive. I would recommend to use the CFR
incoterm because it is fair for both companies and there is no overcharge of
responsibility and we both face the same risk.
3. Please explain the differences between the 4 groups of Incoterms.
Incoterms are grouped into four categories: E, F, C, D.
In group E: EXW. The seller places the goods at the buyer's disposal
on the seller's own premises.
In group F: FOB, FCA and FAS. The seller is charged with delivering
the goods to a means of transport chosen by the buyer.
In group C: CPT, CIP, CFR and CIF. The seller contracts the
transport, but without assuming the risk of loss or damage of the
merchandise or of additional costs.
In group D: DPU, DAP and DDP. The seller bears all the expenses
and risks necessary to take the merchandise to the country of
destination.
4. Who pay the insurance and freight in a CFR incoterm? And who is
going to pay the insurance and freight if we use a CIP incoterm?
CFR incoterm: The payment and risk of the insurance is for the buyer and the
payment of the freight is for the seller and the risk for the buyer.
CIP incoterm: The insurance and freight is paid by the seller and the risk is for
the buyer.
5. We have an importation to Peru of 10000 kg. of beans packaged in bags of
20 kgs each one. The products come from Massachusetts (USA), and we
manage the following information:
a) Price per kg. in the warehouse of the seller: 10 USD
b) Price per Bag in the warehouse of the seller: 1 USD
c) Freight from warehouse of the seller to custom warehouse: 100 USD
d) Freight from the custom warehouse to port of New York 150 USD
e) Load Expenses on the vessel 250 USD
f) Maritime freight New York – Callao 600 USD
g) Insurance by the international transport New York – Callao 50 USD
h) Export license 100 USD
i) Bill of lading prepaid 40 USD
Please calculate:
“20 kg = 1 bag
10 000kg= 500 bags”
· EXW Massachusetts:
TOTAL = 100 000 + 500 = 100 500 USD
Price per kg. in the warehouse of the seller: 10 USD x 10 000kg= 100 000 USD
Price per Bag in the warehouse of the seller: 1 USD x 500 bag= 500 USD
· FCA internal port:
TOTAL = 100 000 + 500 + 150 + 100 + 100 = 100 850 USD
Price per kg. in the warehouse of the seller: 10 USD x 10 000kg= 100 000 USD
Price per Bag in the warehouse of the seller: 1 USD x 500 bag= 500 USD
Freight from the custom warehouse to port of New York 150 USD
Freight from warehouse of the seller to custom warehouse: 100 USD
Export license 100 USD
· FOB New York:
TOTAL = 100 000 + 500 + 150 + 100 + 100 + 250 + 40= 101 140 USD
Price per kg. in the warehouse of the seller: 10 USD x 10 000kg= 100 000 USD
Price per Bag in the warehouse of the seller: 1 USD x 500 bag= 500 USD
Freight from warehouse of the seller to custom warehouse: 100 USD
Freight from the custom warehouse to port of New York 150 USD
Load Expenses on the vessel 250 USD
Export license 100 USD
Bill of lading prepaid 40 USD
· CFR Callao:
TOTAL = 100 000 + 500 + 150 + 100 + 100 + 250 + 40 + 600= 101 740 USD
Price per kg. in the warehouse of the seller: 10 USD x 10 000kg= 100 000 USD
Price per Bag in the warehouse of the seller: 1 USD x 500 bag= 500 USD
Freight from warehouse of the seller to custom warehouse: 100 USD
Freight from the custom warehouse to port of New York 150 USD
Load Expenses on the vessel 250 USD
Export license 100 USD
Bill of lading prepaid 40 USD
Maritime freight New York – Callao 600 USD
· CIF Callao:
TOTAL = 100 000 + 500 + 150 + 100 + 100 + 250 + 40 + 50 + 600= 101 790
USD
Price per kg. in the warehouse of the seller: 10 USD x 10 000kg= 100 000 USD
Price per Bag in the warehouse of the seller: 1 USD x 500 bag= 500 USD
Freight from warehouse of the seller to custom warehouse: 100 USD
Freight from the custom warehouse to port of New York 150 USD
Load Expenses on the vessel 250 USD
Export license 100 USD
Bill of lading prepaid 40 USD
Insurance by the international transport New York – Callao 50 USD
Maritime freight New York – Callao 600 USD
