CES Logistics & Shipping Procedures 2 — Questions and Answers
Question 1: Which document serves as both a receipt for goods and a contract of carriage when shipping by ocean freight?
- Commercial Invoice
- Bill of Lading (Correct answer)
- Packing List
- Certificate of Origin
Correct answer: Bill of Lading
The Bill of Lading (B/L) serves as a receipt for goods, a contract of carriage between shipper and carrier, and a document of title.
Question 2: An Incoterm that requires the seller to deliver goods cleared for export and loaded onto the buyer's carrier at the named place is:
- EXW (Ex Works)
- FCA (Free Carrier) (Correct answer)
- CPT (Carriage Paid To)
- DDP (Delivered Duty Paid)
Correct answer: FCA (Free Carrier)
Under FCA, the seller delivers goods, cleared for export, to the carrier nominated by the buyer at the named place.
Question 3: What is the primary purpose of a Shipper's Export Declaration (SED) or its electronic equivalent EEI?
- To declare the value of goods for customs duty assessment
- To provide statistical data and export control compliance information to the U.S. government (Correct answer)
- To authorize the foreign buyer to receive the shipment
- To certify the country of origin of the exported goods
Correct answer: To provide statistical data and export control compliance information to the U.S. government
The Electronic Export Information (EEI) filed in AES provides the U.S. Census Bureau with export statistics and enables export control enforcement.
Question 4: A 'negotiate' instruction on a Letter of Credit means the nominated bank will:
- Refuse to handle the documents until the issuing bank approves
- Purchase or advance funds against complying documents presented by the beneficiary (Correct answer)
- Forward documents to the issuing bank without payment
- Automatically confirm the credit on behalf of the issuing bank
Correct answer: Purchase or advance funds against complying documents presented by the beneficiary
Negotiation under a Letter of Credit involves the nominated bank purchasing complying documents, effectively advancing funds to the beneficiary.
Question 5: Which type of container is specifically designed for transporting refrigerated or frozen cargo?
- Flat rack container
- Open top container
- Reefer container (Correct answer)
- Dry van container
Correct answer: Reefer container
Reefer containers are temperature-controlled units used to transport perishable goods requiring refrigeration or freezing.
Question 6: Under CIF (Cost, Insurance, and Freight) Incoterms, risk transfers from seller to buyer at:
- The port of destination when goods are unloaded
- The named port of destination
- The port of origin when goods are loaded on board the vessel (Correct answer)
- The seller's warehouse when goods are ready for shipment
Correct answer: The port of origin when goods are loaded on board the vessel
Under CIF, risk transfers to the buyer when goods are placed on board the vessel at the port of shipment, even though the seller pays freight and insurance to destination.
Question 7: What is a 'through bill of lading' used for in international shipping?
- Covering only the ocean leg of a shipment
- Covering the entire journey including multiple modes of transport under a single document (Correct answer)
- Replacing the need for a packing list on multimodal shipments
- Authorizing transshipment without additional documentation
Correct answer: Covering the entire journey including multiple modes of transport under a single document
A through bill of lading covers the entire transportation journey from origin to final destination, encompassing multiple carriers or modes of transport.
CES Logistics & Shipping Procedures 2
Which document serves as both a receipt for goods and a contract of carriage when shipping by ocean freight?