Course Code: INTL $729$

Course Name: Principles of Freight Forwarding

Activity: Module $7$

In this activity, you will recommend insurance coverage, calculate the insurance premium, and suggest improvements for competitiveness and risk management for Export Electronics.

Cargo Insurance Guidelines

Open Policy No$.123456($GGF$-572)$ with Reputable Underwriter Inc.

Gotta Go Freight Inc. For Internal Use Only

The following terms are valid for shipments of new general merchandise shipped on approved steamer, aircraft and$/$or other conveyances to and from places in the world $($except countries$/$places mentioned as$,$On Application$).$

Valuation will be: invoice cost $+$ freight $+10\%.$

Duty and taxes, if applicable, should be declared and insured separately

These rates are applicable only when goods are stowed below deck or containerized.

Oceangoing vessels are approved if classified $$A$1$ American Record, $100$ A$1$ or $$B$.$S$.$ Lloyd$$s Register or the equivalent. Vessels over $15$ years of age must maintain a regular pattern of trading on an advertised schedule to load$/$unload at specified ports. Also, bulk or combination carriers and mineral oil tankers exceeding $50,000$ GRT must NOT be over $10$ years of age. $($These requirements do not apply within the port area.$)$

Rates include war coverage OCEAN AIR TRUCK

World to World: All$-$Risk $\mathrm{.}35\%\mathrm{.}25\%\mathrm{.}20\%$

F$.$P$.$A$.($incl$.$ total loss by theft or non$-$ delivery$)\mathrm{.}175\%$ N$/$A N$/$A

Duty $\_\_\_\_\_\mathrm{.}12\%\mathrm{.}08\%12\%$

Minimum Premium per Certificate: $$25\mathrm{.}00$

Minimum Premium per Declaration: $$15\mathrm{.}00$ air, $$25\mathrm{.}00$ ocean, $$25\mathrm{.}00$ domestic shipment

These countries are considered $$On Application$($effective July $7,2008).$ Call for approval and special rates for transit into or through these countries.

Afghanistan$\_$ CIS$\_$ Georgia$\_$ Somalia$\_$ Angola $($incl$.$ Cabinda$)\_$ Chechnya$\_($incl$.$ Abkhazia$)\_$ Sri Lanka$\_$ Armenia$\_$ China $($some interior destinations$)\_$ Haiti$\_$ Yugoslavia$\_$ Azerbaijan$\_$ Colombia$\_$ Iraq$\_$ Liberia$\_$ Montenegro$\_$ Bougainville$\_$ El Salvador$\_$ Papua New Guinea$\_$ Zaire$\_$ Burundi$\_$ Ethiopia$\_$ Rwanda$\_$

The following goods are NOT considered $$general merchandise$.$ Call for approval and special rates for each shipment of these commodities.

Alcoholic Beverages$\_$ Firearms$/$Ammunition$\_$ Marble$\_$ Accounts: Money notes$/\_$

Food $($Fresh or Frozen$)\_$ Metal Pates$/$Sheets$/$Bars$/$Beams $\_$ Currency$/$Securities$\_$ Furniture$\_$

Metals, Precious$\_$ Antiques$\_$ Furs and$/$or Leather$\_$ Motor Vehicles$\_$ Bagged Merchandise$\_$

Jewelry $($costume & precious$)\_$ Paintings$\_$ Breakables$\_$ Liquids$\_$ Personal Effects$\_$ Bulk Merchandise$\_$ Livestock$\_$ Tobacco Products$\_$ Drugs$\_$ Lumber$\_$ Used Goods$\_$

$($Select the terms that best suit the client$$s needs$)$

Gotta Go Freight Inc.$-$Cargo Insurance Service$-$Internal Document$-$December $2016-$email: insurance@gottago.com

CIFFA Freight Forwarding Company: Gotta Go Freight Forwarding Inc.

Gotta Go is a full service international freight forwarder and regular CIFFA member. Gotta Go provides its customers with the opportunity to obtain insurance coverage on imports and exports under its open cargo policy $($see the Cargo Insurance Guidelines above$).$

Export Electronics Inc. is a new importer $($for one year$)$ and exporter $($very recent$)$ of cellular telephones and personal digital assistants $($PDA$).$

$$ Export Electronics imports from Malaysia, India and the Philippines for Canadian domestic distribution on a CIP Hamilton basis;

$$ Very recently they also obtained distribution rights to Mexico, Argentina, Chile, Peru and Venezuela for its products and have begun to export to these countries;

$$ Each phone and PDA is packaged in a retail cardboard carton weighing $0\mathrm{.}5$ kg and each order is palletized and shrink$-$wrapped by the shipping department at Export Electronics with country specific language instructions and labels. Each phone is valued at US $$50\mathrm{.}00$ and each PDA at US $$100\mathrm{.}00.$

$$ Export Electronics Inc. estimates exports by ocean freight and air freight for $2017$ will average:

Ocean export: $50$ shipments$/$year $-$ average value per shipment: US $$40,000\mathrm{.}00$ Air freight: $20$ shipments$/$year $-$ average value per shipment: US $$10,000\mathrm{.}00$

Export Electronics shipped its first order to Argentina via air freight from Montreal$$s Trudeau International Airport $($YUL$)$ to Buenos Aires $($EZE$)$:

$100$ cartons packaged on one shrink$-$wrapped pallet

$100$ PDAs

$$ Commercial invoice value: US $$10,000\mathrm{.}00$

$$ Actual weight: $100$ @ $0\mathrm{.}5$ kg $=50$ kg $+10$ kg pallet $=60$ kg

$$ Volume weight: $150$ kg

$$ Air freight: CAN $$5\mathrm{.}00/$kg $($CAN $$750\mathrm{.}00)$

$$ Terms of delivery: DAP Buenos Aires airport, Incoterms$2020$

Scenario: The Gotta Go sales representative works with air and ocean export managers and makes a presentation to Export Electronics for both inbound and outbound air and ocean freight.

Included in the presentation is a scenario of what would happen if they used the services of Gotta Go for the air export, including cargo insurance cover under Gotta Go$$s open policy $($refer to the Guidelines