1. Chapter 1: Transportation in International Trade
Pham Thanh Ha (MA)

2. Outline Concept of international transport Transport right/liability
Definition
Characteristics
Effects
Transport right/liability
Dividing of transport responsibility in international sales contracts
Pham Thanh Ha (MA)

3. I. Concept of International transport
1. Definition
International transport is a process in which goods are moved among different countries.
2. Characteristics
Carrying process is conducted among two or many different countries
Departure and arrival points must be in different countries
Relationships, which arising from carrying process, must be regulated by international law scale.
Pham Thanh Ha (MA)

4. I. Concept of International transport
3. Effects of international transport
Promote the development of international trade: “The amount of goods that circulate between two countries is in direct proportion to the product of economic potentialities of the two countries, and is in inverse ratio to distance between them ” (St. William)
Q = P1 x P2 / L
Pham Thanh Ha (MA)

5. I. Concept of International transport
3. Effects of international transport
Expand of goods and market structures in international trade:
Improve the international balance of payments
Pham Thanh Ha (MA)

6. II. Transport right/liability
1. Definition
2. Dividing of transport right/liability in international sales contracts
2.1. Basis to divide of transport responsibility: Incoterms
Pham Thanh Ha (MA)

7. II. Dividing of transport right/liability in international sales contracts
2.2. How to divide: 2 ways
Incoterms 2000: 3 groups
Group 1: transport responsibility belongs to importers (EXW, FCA)
Group 2: transport responsibility belongs to exporters (DDU, DDP, CIP, CPT)
Group 3: transport responsibility belongs to both of importer and exporters (FAS, FOB, CFR, CIF, DES, DEQ)
Incoterms 2000: 4 groups (base on main transport section)
Group E: EXW
Group F: FCA, FAS, FOB
Group C: CPT, CIP, CFR, CIF
Group D: DDU, DDP, DES, DEQ
Special term: DAF
Pham Thanh Ha (MA)

8. Incoterms 2010 Base on main transport stage: Group E: EXW
Group F: FCA, FOB, FAS
Group C: CIP, CPT, CIF, CFR
Group D: DDP, DAT, DAP
Pham Thanh Ha (MA)

9. II. Dividing of transport right/liability in international sales contracts
2.3. Benefits of getting transport right/liability in international trade
Gaining initiative in carriage of goods, negotiation and signing contracts
Utilizing national merchant fleets and other transportation means
Improving the national balance of payment
Promoting the development of other sectors: freight forwarding, broker, consolidation…
Pham Thanh Ha (MA)

10. II. Dividing of transport right/liability in international sales contracts
2.4. Cases that should not get the transport right/liability
Assuming that prices in shipping market sharply increase in comparison with the time of signing sales contract.
Predicting that it will be hard to charter vessels
Calculating that the difference between the CIF/CFR price (export price) and the FOB price that offered by foreign importer (or the difference between the CIF/CFR (import price) that offered by foreign exporter and the FOB price) is not enough to compensate freight and/or insurance premium that we have to pay.
Dividing of transport right/liability is assigned by international law or practices.
Pham Thanh Ha (MA)