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ITT Understanding Freight Forwarding Part 1

This document provides answers to exercises about understanding freight forwarding. It defines key terms like what activities a freight forwarding association might undertake and examples of different types of membership. It also summarizes regulations and documentation standards freight forwarders must consider to facilitate international trade. Overall, the document outlines the roles and responsibilities of freight forwarders in coordinating the movement of goods internationally in compliance with various laws and standards.

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910 views

ITT Understanding Freight Forwarding Part 1

This document provides answers to exercises about understanding freight forwarding. It defines key terms like what activities a freight forwarding association might undertake and examples of different types of membership. It also summarizes regulations and documentation standards freight forwarders must consider to facilitate international trade. Overall, the document outlines the roles and responsibilities of freight forwarders in coordinating the movement of goods internationally in compliance with various laws and standards.

Uploaded by

Digital Era
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Understanding Freight Forwarding

Exercise 1.1 (Answer)


1. What activities might CIFFA undertake to achieve its mission in each of its three
foundation elements?

Membership: Networking, events, e.g., golf tournaments, gala dinners - level playing
field with Standard Trading Conditions, Code of Ethics.
Education: Dangerous Goods training (air, road and ocean), Cargo Security training,
Certificate Programs leading to a Certificate or an Advanced Certificate, international
trade workshops on specialized topics.
Advocacy: Leadership with government and non-government organizations, i.e.,
Canada Border Services Agency, Transport Canada, IATA, FIATA.

2. CIFFA has three categories of Membership. Give an example of who/what type of


company might belong to each category.

Regular Member: Canadian freight forwarding company.


Associate Member: Trucking company, e-commerce company, warehouse, drayage
company.
Personal Member: Professional Freight Forwarder (PFF).

3. FIATA is the acronym for the French name of the parent organization of national freight
forwarding associations (Federation Internationale des Associations de Transitaires et
Assimiles). List 4 of the many areas in which FIATA Technical Committees are active.

Public relations, vocational training, rail transport, road transport, seaborne and
combined transport, Airfreight Institute, customs.

4. CIFFA’s Standard Trading Conditions (STCs) govern the relationship between the freight
forwarding company and its customer. In order for the Standard Trading Conditions to be
valid in court, the customer must be fully aware of the STCs. List at least 3 ways the CIFFA
Member might communicate the STCs to its customers.

Explain the legal complications if your customer is not aware of the CIFFA STCs.

Add reference to STCs in e-mail signature; include reference in quotations and


invoices, i.e.: “All business is conducted subject to the CIFFA Standard Trading
Conditions”; provide an e-mail with the link to the CIFFA STCs at www.ciffa.com;
give a printed copy of the STCs to every new account; have new accounts sign for
the STCs when they sign an account opening or credit application; the customer will
not know what their responsibilities are and can be held liable for:
Improper loading/packaging; improper transporting; limitations of liability, etc. (Refer
to the STCs in the Appendix of the CIFFA ITT textbook for a full description of the
customer’s responsibilities)
Exercise 1.2 (Answer)
1. The freight forwarder is the party who ensures that internationally traded goods, and the
data related to those goods, move from point of origin to point of destination to arrive:

• At the right place

• At the right time


• In good order and condition
• At the most economic cost.

2. What kinds of regulations must an “architect of transportation” consider in order to design


the solution that best meets the customer’s needs?

• International maritime law


• Cargo insurance
• Customs environments
• Cargo security legislation, and
• Understanding of international trade.

3. Explain:

a) How CREEEPSS works between Canada and the United States.

Culture, religion, education, economy, environment, politics, social characteristics


and special characteristics between Canada and the U.S.A. are the same making
trade between the 2 nations easier.
As opposed to, for example, CREEEPSS between Canada and North Korea which is
on the Area Control List.

4. List some of the major parties involved in the movement of goods, documents, and
money in international trade.

• The exporter
• The importer
• The freight forwarder
• The carrier
• The bank(s)
• The government(s), and
• The customs broker.
Answers Understanding Freight Forwarding
Page | 13 2017
5. Why do governments, such as the Government of Canada, provide support to exporters?

• Exports create jobs


• Exports bring wealth into a country, and
• Exports help with the balance of payments.

6. What are the 3 general processes in an international trade transaction?

• Buyer and seller: Negotiating the sales contract


• Forwarder and carrier: Moving the goods and information, and
• Forwarder and customs broker: Customs clearance and delivery.
Exercise 1.3 (Answer)
1. In what city and what year was CIFFA founded?

The Association was founded in Montreal in September, 1948.

2. What is the acronym for the French name of the parent organization of national freight
forwarding associations, of which CIFFA is a member?
FIATA

3. FIATA issues standardized transportation documentation for its Members. Complete the
name of each of these documents:

FCR: Forwarders Certificate of Receipt


FCT: Forwarders Certificate of Transport
FBL: Multimodal Transport Bill of Lading
FWR: FIATA Warehouse Receipt
SDT: Shippers Declaration for the Transport of Dangerous Goods
FWB: Non-Negotiable FIATA Multimodal Transport Waybill.

4. Fill in the blanks of the Code of Ethics of Regular Members.

• The CIFFA Regular Member must discharge his duties with honesty and integrity;
• The CIFFA Regular Member pledges a standard of competence to his client, to perform,
in a conscientious, diligent and efficient manner, services undertaken on the client’s
behalf;
• The Regular Member pledges to hold in strict confidence, all information acquired in the
course of the relationship concerning the business and the affairs of his client. No such
information is to be divulged unless authorized by the client, or required by law;
• The CIFFA Regular Member agrees to observe all relevant laws of Canada regarding the
movement of goods entrusted to him; and
• The CIFFA Regular Member owes a duty to his client, not to withdraw his services,
except for good cause, and upon appropriate notice.
Answers Understanding Freight Forwarding
Page | 15 2017
Exercise 1.4 (Answer)
1. What two things must today’s freight forwarding company invest in?
• Knowledgeable employees, and
• Information systems.

2. What are some of the names/titles given to “architects of transportation solutions?”


• Global logistics provider
• International freight forwarder
• Third party service provider
• Transportation intermediary.

3. In order to facilitate movement of goods around the world, the freight forwarder must
understand the need for regulatory compliance. What are some of the things that are
governed by regulations and legislation?
• Cargo security
• Advance commercial information
• Export declarations
• Import customs clearance.

4. What are some of the risks which are particularly associated with the movement of
goods?

Loss, damage and delay.

5. Why does a freight forwarding company require a network with solid representation at
destination?

• For unloading and deconsolidation of ocean export consolidations


• For receiving payment on “charges collect”
• For arranging local delivery and offer inbound consolidation.

6. Why does a freight forwarding company require a network with solid representation at
origin?

• To arrange and pay for pick-up overseas


• To make sales
• To offer inbound ocean consolidation service.
Answers Understanding Freight Forwarding
Page | 16 2017
7. What are some of the “controllable aspects” of a new market that the exporter may have
control over?

• The selling price


• The product development
• The distribution (place)
• The promotion.

8. What are some of the standards and requirements a Canadian importer must consider to
ensure goods are suitable for the domestic market?
• Packaging
• Electrical goods must be CSA or UL
• Marks and labels such as country of origin.

9. What three governments will have an interest in an international transaction?


Government of the origin country, transit country and destination country.
10. When buyers and sellers negotiate an international contract, what two very important
terms must be considered?
1. Terms of payment: how and when the buyer pays the seller
2. Terms of delivery (INCOTERMS): the risk, responsibility, and cost for shipping the goods.

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