Chapter 14 - Export and Import Practices
Answers to Questions
1. In exporting, to what point does the seller pay transportation and delivery costs?
Where does the responsibility for loss or damage pass to the buyer? Use Incoterms in
The possible responses to the question are summarized in Fig. 14.1. The seller may or
2. Explain the various export payment terms that are available and the protection they
offer the seller.
Cash in Advance offers most protection to the seller because the seller receives payment
3. What is the procedure for a letter-of-credit transaction?
4. The manager of the international department of the Cape Cod Five Bank learns on the
way to work that the ship on which a local exporter shipped some goods to Spain,
Wellfleet oysters in salt water tanks, has sunk in high seas. She has received all the
documents required in the letter of credit and is ready to pay the exporter for the
shipment. In view of the news about the ship, the manager now knows that the
Spanish customer will never receive the goods. Should the manager pay the exporter,
or should she withhold payment and notify the overseas customer?
5. What is a foreign trade zone? Check with a customhouse broker or a U.S. Customs
official or do some online research to determine the advantages of a foreign trade
zone over a bonded warehouse.
6. What are the purposes of an export bill of lading?
The export bill of lading serves three purposes: (1) contract for carriage between the