Senior Cat About The 2nd – Logistics Quiz!
Senior Seagull This is 7:31 video.
2nd! Logistics Quiz
Hello, it’s Iino. Here we go again! Here is the 2nd time logistics quiz. The motto of this channel is, “it’s fun to learn logistics”. So I try to make learning about logistics interesting.
Now, let me explain the rules of the quiz. An image will be displayed for each question. It’s a multiple choice quiz, so please choose the correct answer. By the way, there may be two correct answers.
Here we go!
1st Question
1st Question. What’s the benefit of the exporter using Ex-works?
A. They control all of the logistics flow.
B. They do not need to take any risk for logistics.
C. They can delay the production schedule.
D. There is no benefit.
The answer is…
B. They do not need to take any risk for logistics.
With Ex-Works, the Importer has to arrange all logistics process, which means an importer takes all responsibility of cargo risk from the exporter’s factory, to the delivery address in the importing country.
So, if there is an option of choosing, “less stress for arranging logistics”, it would have been a correct answer as well.
2nd Question
2nd Question. What’s the benefit of the importer using Ex-Works?
A. They can control all of the logistical flow.
B. They don’t have to pay logistics cost.
C. They don’t have to pay import and consumption tax.
D. They can choose their freight forwarder.
The answer is… A and D
As previously explained, with Ex-Works,the importer will make all logistics arrangements.
Their responsibility is to handle the logistics from the exporter’s factory to the delivery address in import country.
Therefore, the importer chooses the trailers, customs agents and freight forwarders at both exporting and importing side. All logistics will be controlled by the importer.
3rd Question
3rd Question. What’s the disadvantage of the importer using Ex-works?
A. There is no disadvantage.
B. It difficult to use if the agent is not familiar with exporting countries.
C. They struggle to obtain space on a vessel.
D. They have to take full responsibility of the cargo risk.
The answer is… B and D
With Ex-works, the importer arranges the logistics on the exporting side.So the freight forwarder needs to have good knowledge of the exporting side.
In logistics industry, each freight forwarder has strengths and weaknesses. If the importer does not have a branch or good agents in the exporting country, it is difficult to arrange the logistics in this country.
Even if the importer is able to make arrangements without them, they may struggle to solve the problem, if it happens.
As I explained, the importer has to take all of the risk responsibility. So they have to find and cooperate with the good freight forwarder who knows well about exporting country.
4th Question
4th Question. With FOB, at which point, the cost and cargo risk will switch to the importer?
A. CY at exporting side.
B. CY at importing side.
C. When the cargo is loaded onto a vessel at the exporting side.
D. When the cargo is unloaded at the importing side.
The answer is… C. When the cargo is loaded onto a vessel at the exporting side.
CY is a short term for container yard. With FOB, the cost and cargo responsibility moves from the exporter to the importer when the cargo is loaded onto a vessel at exporting country. Not at CY.
Previously, we mentioned the importer’s disadvantages. For the importer, if they don’t know about the exporting country, it is difficult for them to make logistics arrangements.
If importing from a country which the importer is not familiar with, they can use FOB, which the exporter will handle the logistics at exporting side. This will minimize the logistics risks for the importers.
5th Question
Last question. Which incoterms does this image show?
A. DPU
B. FOB
C. CIF
D. FCA
Now, we got a telephone lifeline!
D!
Final answer?
The answer is… It’s D, FCA!
With incoterms FCA, the exporter takes responsibility of the cost and risks to the designated location of the exporting side. It can be the CY, or a designated warehouse at the exporting side.
If they choose a designated warehouse, the exporter may use it to consolidate different exporters’ cargo together which is buyer’s consolidation.
On the other hand, if they decide to use the CY at the exporting side, the cost and risk responsibility moves to the importer, once cargo enters the CY.
This means, if the cargo is affected by an earthquake or tsunami, after it enters the CY, the importer has to take responsibility of the cargo damage risk.
In business, FOB is more commonly used. however, it is important to choose the best suitable incoterms for you.
Summary
How did you like the quiz, this time?
It is important to understand incoterms, but the practical side is more important.
Trading situation is not the same all the time, so you need to understand your dealing situation and the most suitable incoterms have to be chosen.
I will continue to create case study videos and quizzes, to provide information on logistics.
That’s all for now. See you in the next video! Thank you!
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