Assignment Task: Read the scenario below and through team discussion provide responses to the questions that follow in the space provided. Your responses must be specific to this scenario not in general terms. You may refer to TradeTutor.
Scenario:
You are a freight forwarder who has received a call from a Canadian export customer. This customer is negotiating a sales contract for an FCL shipment of lentils to a small buyer (food wholesaler) located in Germany. This would be their first order with this company. The buyer is prepared to accept their best DPU price to the port of Hamburg Germany/Incoterms 2020 of $20,000.00 CAD. The buyer has requested that the seller issue a draft for the full invoice amount upon shipment with terms 10 days sight. The buyer also requests that the shipment documents (Draft, 3/3 set bill of lading, certificate of origin, invoice and packing list) be sent to his bank within 5 business days from the on-board date. Your customer (the seller) is unsure whether to agree to all of these terms and seeks your advice.
Questions:
1. Based upon Incoterms 2010 list 5 responsibilities that the seller will have if selling using DPU price to the port of Hamburg Germany/ Incoterms 2020 term.
2. If this shipment incurred damage as it was being unloaded from the ship at the port of Hamburg, which party (buyer or seller) would have risk?
3. If this shipment is damaged by salt water on the way to Hamburg which party (buyer or seller) would have risk?
4. Which party (buyer or seller) would be obligated to insure this shipment for main carriage?
5. If the product is damaged during rail carriage to the buyer's warehouse in Germany which party (buyer or seller) would have risk?
6. Would you recommend that your seller proceed with this transaction using the term DPU? Support your opinion or suggest an alternative term and support that choice.
7. Which specific method of payment is the buyer requesting and how is this known?
8. Using this method of payment could the buyer obtain this shipment prior to payment or could the seller maintain control of the shipment? Explain.
9. Assessing the risks would you recommend that your customer (the seller) accepts the method of payment that the buyer is offering? Support your response and if appropriate suggest an alternative method.