Questions

You are an independent observer

1. Draw a comprehensive flow chart indicating a corresponding timeline detailing every stage of the transaction – physical, documentary, and financial events – as mentioned in the Case Study, showing the linkage between EM, all service providers, IDs, and ultimate buyers in the Country A. Your flow chart should reflect the profiles of EM and IDs as described

2. Given the contractual arrangements and market description, what are the contractual and risk implications to EM and IDs if the Incoterms agreed between EM and all IDs were uniformly changed to CIF Port of Discharge in Country A? You are appointed Business Advisor to EM (Questions 3, 4 and 5)

3. Given all the arrangements as laid out in the Case Study (as illustrated by the flow chart prepared in response to Question 1), till which point of time/event occurrence should EM retain the title (as in ownership) of the goods transacted? Explain your choice of recommendation

4. As is evident from the description above, the bills of lading will be issued in Liner format showing the transit only between the ports of loading and discharge. To best protect EM’s interest in the event of any mishap, how should the bills of lading be made out in regard to ‘Consignee’? Choose one of the three options listed below.

a) ‘To Shipper’s Order’ and blank endorsed by EM on the reverse side of every original BL

b) ‘To order of ID’

c) ‘ID’ with their address as stated in the contract between EM and ID. Explain your choice

5. Assuming EM values and wishes to retain the collective business offered by IDs in Country A at current levels of profitability and given the competitive situation in both countries, what steps should EM undertake to protect the trade flow from competitive approaches from other EMs in Country B or elsewhere? Frame your response in terms of a trading strategy. Please outline any contractual changes you may wish to suggest, stating the assumptions you choose to make.