Logistics and Incoterms: Perishable Fish Shipment Analysis

This report analyzes the logistics of shipping perishable fish from Cape Town to London, focusing on the application of Incoterms. The paper discusses the challenges associated with transporting perishable goods and examines four relevant Incoterms: Carriage Paid To (CPT), Carriage and Insurance Paid To (CIP), Free Alongside Ship (FAS), and Delivered Duty Paid (DDP). It explains the responsibilities of the seller and buyer under each Incoterm, including cost allocation, risk transfer, and insurance requirements. The analysis emphasizes the importance of selecting the appropriate Incoterm to mitigate risks and ensure the safe and timely delivery of the fish. References from academic sources support the analysis, providing a comprehensive understanding of Incoterms in the context of international trade and perishable goods transportation. The report highlights the critical role of Incoterms in regulating the relationship between the seller and buyer, especially in the context of perishable goods, and emphasizes the need for careful consideration of each Incoterm's implications.

Incoterms 1
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The logistics sector is widely known for its ability to transport and deliver a variety of products
across distant regions. Food has become one of the most common commodities distributed by
shipping companies. It is due to it being among the products that have been transported for an
extended period now. Transportation of perishable goods has become to most of the shippers a
standard delivery activity, (Pathak, 2016). Perishable goods such as fish are delivered to various
food stores and establishment across the globe regularly. Although the shipping is done
periodically, it has enormous challenges facing the shipping process. This paper will address the
relevant incoterms that affect the transportation of perishable fish from Cape Town to London.
Carriage Paid to (CPT)
While transporting perishable fish, it is essential to ensure that the seller covers the costs of
transporting the fish up to the named point of delivery. The consignment is considered delivered
once it is handed over to the primary carrier identified. It enables risk transfer to the buyer of the
fish. The seller will be responsible for product origin cost which includes freight costs and export
clearance billing. In case a seller is required to ensure the cargo, the incoterm provisions of CPT
are considered, (Erdogan and Kavas, 2020). The requirements guide on the party needed to bill
for the insurance.
Carriage and Insurance Paid to (CIP)
The terms in this policy are closely similar to the provisions of CPT with the only difference of
the seller required to obtain insurance of the cargo while shipping. This policy calls for the seller
to cover 110% of the cargo price under Institute Cargo Clause of the Institute of London
Underwriters unless the transacting parties have an exclusive agreement in place regarding
insuring the cargo, (Erdogan, and Kavas, 2020). The value currency in the policy should be

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similar to the money used in the contract and should enforceable for claims by all parties having
insurable interests in the cargo.
Free Alongside Ship (FAS)
The seller of the perishable fish delivers the goods when placed alongside the vessel of the buyer
at the port of delivery in London. Hence, the buyer is responsible for all the risks, losses and
damages that the cargo is exposed to from that point, (Carr and Stone, 2017). The seller is
responsible for clearing goods for exports. However, the contracting parties wish for the fish
buyer to make for goods export requirement, they should explicitly put it down in writing in the
contract.
Delivered Duty Paid (DDP)
The seller is required to deliver the fish to the identified port in London and caters for all
subsequent costs in bringing the fish to the delivery port. However, he is not liable for unloading
the fish. This incoterm puts maximum responsibility to the seller and limits the obligations of the
seller, (Carr and Stone, 2017). It guards the buyer against the perishability nature of the fish.
Perishable goods are among the most commonly shipped cargo across the port of Cape Town
and London. Both the seller and buyer are exposed to risks and losses associated with the
perishability nature of the shipment. For this case, incoterms regulate the mode of relationship
for the two parties. Some of the incoterms that should be considered have been discussed in this
paper.

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References
Bhogal, T. and Trivedi, A., 2019. INCOTERMS 2010. In International Trade Finance (pp. 117-
130). Palgrave Macmillan, Cham.
Carr, I. and Stone, P., 2017. International trade law. Routledge.
Erdogan, M. and Kavas, E., 2020. Incoterms and New Transport Types: The Importance of
Drones. In Handbook of Research on the Applications of International Transportation and
Logistics for World Trade (pp. 151-180). IGI Global.
Pathak, A., 2016. Understanding Incoterms 2010. Available at SSRN 2712669.