Page 280 - DMGT545_INTERNATIONAL_BUSINESS

Unit 14: International Production and Logistics Management

place of destination. Buyer is responsible for all costs and risks from this point forward including notes
clearing the goods for import at the named country of destination.
Delivered at Place (DAP): Seller clears the goods for export and bears all risks and costs associated
with delivering the goods to the named place of destination not unloaded. Buyer is responsible
for all costs and risks associated with unloading the goods and clearing customs to import the
goods into the named country of destination.
Delivered Duty Paid (DDP): Seller bears all risks and costs associated with delivering the goods
to the named place of destination ready for unloading and cleared for import.

14.5.2 rules for sea and inland Waterway transport

Free Alongside Ship (FAS): Seller clears the goods for export and delivers them when they are
placed alongside the vessel at the named port of shipment. Buyer assumes all risks/costs for
goods from this point forward.
Free on Board (FOB): Seller clears the goods for export and delivers them when they are onboard
the vessel at the named port of shipment. Buyer assumes all risks/cost for goods from this
moment forward.
Cost and Freight (CFR): Seller clears the goods for export and delivers them when they are
onboard the vessel at the port of shipment. Seller bears the cost of freight to the named port of
destination. Buyer assumes all risks for goods from the time goods have been delivered on board
the vessel at the port of shipment.
Cost, Insurance, and Freight (CIF): Seller clears the goods for export and delivers them when they
are onboard the vessel at the port of shipment. Seller bears the cost of freight and insurance to
the named port of destination. Seller’s insurance requirement is only for minimum cover. Buyer
is responsible for all costs associated with unloading the goods at the named port of destination
and clearing goods for import. Risk passes from seller to buyer once the goods are onboard the
vessel at the port of shipment.



Case Study samsonite’s Global supply chain
amsonite Corporation is a US-based company that manufactures and distributes
luggage all over the world. In fiscal year 2002, Samsonite generated $736.3 billion in
Srevenues but incurred losses equal to $3.59 per share in 2002, $2.01 in 2001, and $2.53
in 2000. Samsonite was listed on the NASDAQ stock market, but it was delisted in January
2002 for failing to meet NASDAQ standards. Samsonite began in 1910 in Denver, Colorado,
and it took many years for it to become a global company. In 1963, Samsonite set up its first
European operation in the Netherlands and later, in 1965, began production in Belgium.
Shortly thereafter, it erected a joint-venture plant in Mexico to service the growing but
highly protected Mexican market. By the end of the 1960s, Samsonite was manufacturing
luggage in Spain and Japan as well. In addition to its manufacturing operations, Samsonite
was selling luggage worldwide through a variety of distributors.
In the 1970s, business began to take off in Europe. In 1974, Samsonite developed its first
real European product, called the Prestige Attache, and business began to expand in Italy,
causing it to rival Germany as Samsonite’s biggest market in Europe. Although the US
market began to turn to softside luggage in the 1980s, the European market still demanded
hardside luggage, so Samsonite developed a new hardside suitcase for Europe called the
Oyster case. Then softside luggage began to increase in importance, although Europe was

Contd...

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