Documentations and international trade Assignment

Case study 1
Table of Contents
Introduction..............................................................................................................................1
Consignment folio..................................................................................................................2
Shipping details........................................................................................................................2
Country of Origin.....................................................................................................................3
Actual products........................................................................................................................3
Sea Route..................................................................................................................................4
Company evaluation and shipping..........................................................................................4
Actual export Process...............................................................................................................8
Documentations and international trade................................................................................8
International commercial terms (Incoterms).......................................................................11
Free on Board (FOB)......................................................................................................11
Cost & Freight (CFR)......................................................................................................11
ExWorks (EXW)..............................................................................................................11
Cost, Insurance & Freight (CIF)....................................................................................11
Letter of Credit (LOC)...........................................................................................................11
Marine insurance....................................................................................................................11
Disputes and Resolution.........................................................................................................12
Conclusion...............................................................................................................................12
References...............................................................................................................................13

Case study 2
COURSEWORK
MODULE
International Business Environment and Trade
MODULE INSTRUCTOR
SUBMITTED BY:
Course
Professor’s Name
Institution
Location of Institution
Date

Case study 3
Introduction
Sheeh Autos Supplies (SAS) is an automotive dealer specifically for importing
German made motors from Germany to America. The company has put in place strict
regulations to ensure its day to day activities meets all standards of international laws. SAS
has grown through the years to become one of the leading auto dealers in the America. It
imports the cars from Daimler AG which is among the leading car manufacturing companies
based in Germany, distributes the cars and spare parts to the different sub-dealers within the
country. Its head offices are located in New York.
SAS is a trusted company globally by most car auto dealers and the brand users due to
its strict adherence to quality and contractual agreements and its ideal location of several
warehouses within America. The company works with the various USA companies through
contracts that meet international trade regulations in all international business laws that
include the banking system, careers and the insurance policies governing the goods being
shipped (Moon 2018). SAS annual report basically highlighted the pertinent risk and
opportunities that can significantly affect the company’s cash flow, profitability and the
financial position in general.
Consignment folio
Brand Particular Model Quantity Prices
Mercedes-Benz Car AMG- C43
coupe
10 white & 8
red
Each $35,800
Each $47,200

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AMG Glee 43
Sprinter 3500
15 white
9 black & 10
white
Each $48,350
Truck X class
E class
8 white
8 white
Each $98,000
Each $103,500
Shipping details
Transportation to take utmost 10 days before reaching the bonded warehouse at the
entry port, imports to be in relation to the US Anti-dumping Laws (ADL) which states that
there should be a ratio between the domestic pricing and the country of origin’s pricing,
(Filippo 2015). In relation to this act evaluators in the mechanical departments deployed
ensure that all the autos has the stickers with details of the autos i.e. model, pricing, age,
spare parts and VIN number (Vehicle Identification Number).
The company being a registered auto entity must have certification document of each
car fixed by the manufacture right from the country of origin, no certification, no entry.
According to US National Highway Traffic Safety Administration (NHTSA 2015), except
motorbikes, all other vehicles must have their respective certification tag and form HS-7
signed for declaration in accordance to Federal Motor Vehicle Safety Standards (FMVSS).
Country of Origin
Even though Germany and United States enjoys the international trade privileges
related with the European Union, Germany through their export regulatory acts and custom

Case study 5
tariff, (Germany 2018, p.23), the goods exported should not be in the prohibited export
category, such category often require licensing before leaving the country.
Per the German’s export protocols, article 161 of the exportations should be in
accordance with the community monitoring of the European Union and also limited to the
domestic regulatory. The German Federal Office of Economics and Export control acts
ensures in issuing of authorization of the goods to be exported. German trade regulatory law
charges a tax turnover.
Actual products
Each of the imported auto should include a label with details of the product. Specific
to the autos, the car/truck model number and name, manufacturing company, VIN, price
quotations, date of manufacturing. The price quotations are generally to determine the
taxation rate by the country of destination and based on EU regulatory, the manufacturing
dates are used to estimate the age the limitation acts of the imported autos to minimise
dumping, (Filippo 2015). The following show the label tag fixed in an imported auto.
Fig 0. Car Label
Sea Route
The shipping process uses the closest and most affordable sea route mostly with an
intent to reduce the transportation duration. The geographical view below indicates the most
preferable routes used by SES. The preferred option is the direct big ship route:

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Fig 1. The big ship route.
Alternatively, the Atlantic pacific express route can be
used, this passes via the Dutch harbour.
Fig 2. The Atlantic pacific
express.
Company evaluation and shipping
Since SAS is adamantly interested in complete transportation without any incur loss,
the company is categorical in deciding the best and most reliable shipping agency. During
packaging, the company have two alternatives i.e. Containerisation or by use of Ro/Ro
vessel. Due to affordability of the roll on/roll of (Ro/Ro) channel since it, the company opts
to use it compared to Containerisation. Via the Ro/Ro channel, thousands of cars and trucks
are safely fastened and transported at once (UNDP practice series 2008).

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Fig 3: Transportation of cars and trucks, (UNDP practice series 2008)
Based on the reliability, efficiency, insurances offered, transportations cost and
loading off-loading services, the company identified the following shipping agencies as the
most preferred:
 Laeisz Group Logistics
 Hapag Lloyd Rotterdam
 Horizon line Auto shipping Inc.
 Matson Navigation Company Inc.
1.) Laeisz Group Ltd.
The Laeisz logistics group founded in 1824 is among the leading transportation
companies in German in the logistics and maritime sector with approximately over 1500 ship
crew. According to Reinnard 2013, the company offers several services ranging from Ro/Ro
ferry services, containerisation, car and truck transit, bulk transit, research, and gas tanker
channels. Their operational activities serve the Europe side, Canada port, North and South
America, Italy, France and Africa etc. In 2008, the company was accredited with certificate
of excellence in Germany thus relating to their continuity in service delivery in the marine
sector, (F. Laeisz 2012).
Perhaps in relation to their certified excellence in performance, the company is
considered ideal in terms of safety, service quality, adherence to the environmental regulation
and policies as well as security issuing. They have underlying principles that guides their
operation, (Reinnard, 2013). The cost estimation with this company have been approximated
to be 12,720 Euros inclusive of road inland transportation to the warehousing destination off
the destination port. This might take a working days of up to 9 days from documentations,
port of departure to arrival port.

Case study 8
2.) Hapag Lloyd Rotterdam Ltd
Hapang-Lloyd is among the historical maritime companies initiated in the mid 19C
century in Germany and today they are among the renowned global shipping companies and
most reliable maritime services. Averagely, it provides approximately over 120 global liner
networks across all the continents with fixed modern ship at the ports (Hapag-Lloyd AG
2009). Due to the reliability, commitment to serve and their compliance, it received more
than 5 awards in 2017 with different awarding organization with FCL global carrier of the
year 2017 being the latest award, (Hapag-Lloyd).
Its latest improvement on the Hapag-Llyod, Atlantic Loop 5 (AL5) schedule to
increase reliability greatly influenced SAS Company to consider doing business with them.
The AL5 schedule specifically targeted improvement of the direct shipping within North
Europe to North America, extension of the Europe port harbour and extension of coverage to
Seattle & Vancouver. The cost evaluation with Hapag-Lloyd is approximately 8,582 Euros
exclusive of inland transportation services with a span of 10 working days
3.) Horizon line Auto shipping Inc.
Horizon line Auto started in 1992 based in Houston. They provide the seller-buyer
interface in relation to maritime services at affordable charging rates across the globe, their
maritime agents are located at every port oversees to ensure service delivery to the potential
clients. Among their trustable service include the tracking mechanism by any client but only
through their consent, clients details have to be included while in the tracking system
otherwise there no access. Other services they offers include the general cargo, vehicle and
household goods, governmental cargo projects and hazardous materials etc.
Destinations include Canada, Europe, Middle East, Australia, japan etc. Estimated
evaluation cost is approximately 10, 875 Euros thus cheaper to SAS company, inland

Case study 9
transportations are also available however exclusive on the cost. A total of 9 working days
are set up for the cargo delivery to the country.
4.) Matson Navigation Company Inc.
Matson Company Inc. initiated in 1882 with its current head location in Hawaii with
general merchandising as its initial start-up. Today, Matson is among the recognised
companies in the maritime sector mostly in the innovation of Automatic Equipment
Identification (AEI) during transportation and GPS tracker, (Jeff Hull/Matson 2010). For
better delivery, the company has partnered with Matson integrated logistics, Matson global
distribution services Inc. and Matson terminal Inc.
In the report according to (Deloitte and Touche 2012), services offered include ocean
freight, containerization and vessel information i.e. Ro/Ro service. The three partner are
assigned to deal with international services, intermediary services and destination point
services respectively. Estimated evaluation is approximately 12,780 Euros inclusive of all the
three services within a duration of utmost 8 working days.
This cost evaluation puts Hapag Lloyd Rotterdam as the most appropriate company to
partner with SAS during shipping. Despite the company taking longer days compared to other
competitors examined, its charging rates are more favourable thus the days indifferences
seems to be negligible.
Actual export Process.
Documentation being an integral part of any importation, it must be in relation to the
US custom boarder and protection (CBP) Upon successful passage of the documentations, the
buyer is thus expected to make prior arrangements to inform about his or her importation
concerning the exact dates of arrivals. On the arrival day, the pro-forma invoice should be

Case study 10
issued to the CBP official. The documents includes all the details of the product and not
limited to the charges, taxes and payment details involved during the process. The exporter
need to be affirmed that the goods are accepted by the importing country through the invoice,
(Edgar Pagaza 2013).
Fig 4. Pro-forma Invoice
Documentations and international trade
1). Bill of Lading (B/L) or Shipping document
This the document issued by the shipping company upon the completion of cargo
loading. It entails the consignee (receiver) name and details, shipper name, country of origin,
product weight, both port of loading & port of receiving, product description and
measurements, (Hapag-Llyod). This document is further only issued to the consignee upon
settlement of payment otherwise to be held by the agent. The document serve as the contract
evidence between the involved parties and signed upon full agreement.
Fig 5. B/L

Case study 11
2). Commercial Invoice
Often issued by the seller indicating the details of the car, The VIN number,
incoterms, loading port, estimated car value, and the weight in tonnes. The invoice must be
include the stamp by the country of origin. The Custom export declaration document will not
be used since it’s only for countries outside the European Union according the German
government, (Custom union, 2010). In case there are some changes in the Pro-forma invoice,
the commercial invoice should be updated to match them. When SPC
accepts the terms in Pro-forma, it confirms that the conditions in the
commercial invoice are the same before taking the order (Jansson
2012).
Fig 6. Commercial invoice
3). Certificate of origin
Indicates the country of Origin as well as the destination country (Gozde 2013). It is
essential mostly in cases where duty rates and treaty arrangements are crucial factors. For
instance, the duty rates charged on cargo from Germany is different from the rates charged on
load originating from on the Arab Emirates.
4). Packing List:
The packing list is a document which mainly determines the count on each piece at
the customs entry. The list gives the weight. Quantity and descriptions of goods. This
document helps the customs broker of SAS Company to have precise information that he can

Case study 12
be used to determine if the products packed are of correct weight, quantity, and description as
provided in the commercial invoice (Martincus, Carballo and Graziano 2015).
5). Freight Invoice:
Freight invoice is a document stating clearly the Cost incurred in transportation of
goods, and it is of two types. It can either be collected in the destination or prepaid in the
place of origin before shipping the products. Whereas the collect kind of cargo, payment is
formed at the destination after the shipment is shipped. SAS majorly use collect freight
invoice (Gozde 2013).
International commercial terms (Incoterms)
Free on Board (FOB). It is the mandate and responsibility of the seller to deliver,
load to the port and customs clearance based on country of originality after which
other associated risks are upon the importer inclusive of transportation.
Cost & Freight (CFR). Goods clearance at the port of country of origin are done by
the seller after which across the ship rails the buyer takes over other responsibility and
risks including custom duty and offloading etc.
ExWorks (EXW). The seller delivers the goods up to the door step (Country) of the
buyer but the buyer is mandated to all the charges and risk associated, these charges
are exclusive of loadings.
Cost, Insurance & Freight (CIF). Here, the exporter is responsible of all the duties
and payments including both at the port of export and port of import. However, this
Incoterms is based on insurance and in case of any complain the experienced by the
buyer after delivery he/she has to contact the seller.

Case study 13
Letter of Credit (LOC)
Are assurance by a commercial bank in the place of a buyer that expense will be fully
paid to the manufacturer as long as the terms and conditions agreed on by the two parties
have been met (Menuka 2017). SAS pays a bank to offer this service. LOC is a useful tool
because it makes it possible for SPC to work with global auto manufacturers who may not be
in a position to its credit information. In relation to this, SAS collaborates with Barclays
bank, and it issues the LOC per the USA exporting company considering the request of the
applicant of the letter of credit. According to UCP 600, a Letter of Credit can be made
available through Payments, acceptance by a Drawee bank, Usance credit and negotiation.
Marine insurance
The insurance cover for the freight during shipping. In truck /car transportation, the
insurance full cover is often approximated to be 1.5% in relation to the car/truck value.
However, the insurance is not liable to petty damages caused on the trucks/cars during
transportation. On the Ro/Ro cover, the marine insurance only compensate upon the
occurrence of the total loose, minor damages are out of their compensation schedules. The
SAS Company considers the ferry insurance cover as the most appropriate.
Disputes and Resolution
Basically in most international trades, there are chances of a breach to the terms and
condition. In case of such scenario, both the importing country and exporting country often
uphold to equality as per the terms and condition. In an attempt to restore international trade
peace, the two parties, through the international financial settlement under the European
commission proposes the best ways of restoring equality and dispute settlement.

Case study 14
Negotiation being among the dispute resolution criteria, chances of rejecting the
negotiator’s panel outcomes are very high despite it being an ideal resolution aspect. In case
where either of the parties are unsatisfied, trade barriers and other restriction might be the
consequences. Secondly, the court through the enacted international laws might be used, in
2015 there was proposal by the EU (EU 2015) to formulate investment court system (ICS)
responsible for dispute settlement. The SAS Company prefers the use of international court in
case of disputes.
Conclusion
In conclusion, SAS company being a an auto dealer with an intent of reaching the
international standards, is passionately striving towards maintaining and adhering to the terms
of trade of the latter so as not to fall a victim of trade law ignorance. The availability of EU
have been quite significant due to its underlying mechanism of reducing trade barriers which
has been associated with positive impact within Europe. Consequently the good market
relation between the Germany and US nations has been boosted inclusive of the availability
of maritime services and insurances.

Case study 15
References
Custom union. (2010). Customs code committee import /export formalities section. European
Commission directorate-general taxation and customs union, pp.1-44. Available at
http://ec.europa.eu/ecip/documents/procedures/export_exit_guidelines_en.pdf
Deloitte, & Touche. (2012). Annual report [Online]. Available at
https://www.matson.com/corporate/pdf/2012AnnualReport.pdf
Drobetz, W., Gounopoulos, D., Merikas, A. and Schröder, H., 2013. Capital structure
decisions of globally-listed shipping companies. Transportation Research Part E: Logistics
and Transportation Review, 52, pp.49-76
Edgar Pagaza. (2013). Customs and Border Protection Applicant Guide. [Online] Avaialble
at
http://epagaza.weebly.com/uploads/2/0/8/8/20881746/instruction_manual._edgar_pagaza.pdf
European Commission. (2015). Dispute settlement - Trade - European Commission. [Online].
Available at http://ec.europa.eu/trade/policy/accessing-markets/dispute-settlement/
F. Laeisz, G. M. (2012). Corporate information of the Laeisz group. Fleet News, (15th), pp. 1-
8. Available at
http://www.laeisz.de/fileadmin/user_upload/PDF/Laeisz_FleetNews_2012_No15_.pdf
Filippo, C. D. (2015). Antidumping and Countervailing Duty Handbook (4th Ed.).
Washington DC. Available at https://www.usitc.gov/trade_remedy/documents/handbook.pdf
Germany. (2018). Part 4: Export prohibitions and restrictions. In Custom tariffs (pp. 21-46).
Avaialble at http://www.uk-customtariff.com/content/contentlist/volume/vol1_4.pdf
Hapag-Lloyd AG. (2009). the history of the Hapag-Lloyd AG. [Online] Shiping made in
Hamburg, pp. 1-40. Available at https://www.hapag-lloyd.com/en/about-us.html

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Hapag-Lloyd. (n.d.). Our Awards - Hapag-Lloyd [Online]. Available at https://www.hapag-
lloyd.com/en/about-us/our-awards.html
Hapag-Llyod. (n.d.). Bill of Lading. [Online] Avaialble at
https://www.hapag-lloyd.com/content/dam/website/downloads/pdf/Hapag-
Lloyd_Bill_of_Lading_Terms_and_Conditions.pdf
Hornok, C. and Koren, M., 2015. Per-shipment costs and the lumpiness of international
trade. Review of Economics and Statistics, 97(2), pp.525-530.
Jansson, J., 2012. Liner shipping economics. Springer Science & Business Media.
Jeff Hull/Matson. (2010). Matson Navigation Company, Inc. Alexender & Baldwin Inc, pp 1-
4.Available at http://www.valueplays.net/wp-content/uploads/Matson.pdf
Menuka, B., 2017. Business Management Ideas. [Online]
Moon, B.E., 2018. Dilemmas of international trade. Routledge
NHTSA. (2018). Vehicle Importation Guidance. [Online]. Available at
https://www.epa.gov/importing-vehicles-and-engines (Accessed 12 May 2018)
Reinnard, T. (2013). F. Laeisz Group. [Online] Available at
http://flaeiszgroupwasfounded1824.blogspot.co.ke/
UNDP practice series. (2008). Shipping and incoterms. Available at
http://www.undp.org/content/dam/undp/documents/procurement/documents/UNDP-
Shipping-Guide.pdf