Тема №6: Terms of delivery.

The contract of sale stipulates the price and the terms of delivery, which constitute the framework of the agreements, on financing, insurance and transportation. In accordance with the responsibilities of the parties in respect of the expenses of delivery and the risks of accidental damage to or loss of the goods there may be varies terms of delivery.

When goods are to be sent by ship, the following costs have to be paid:

1.The cost of transporting the goods from the seller’s factory or warehouse to the port of shipment from which they are to be shipped abroad.

2. The cost of loading the goods onto the ship at the port of shipment.

3. Freight costs-the charge made for carrying the goods on the ship.

4.The insurance costs incurred while the goods are being transported.

5.The cost of unloading the goods when the ship reaches the port of destination in the importing country.

6.The cost of transporting the goods from port of destination to the buyer’s warehouse.

If the goods are delived on FOB the seller pays for the transportation of the goods to the port of shipment and the loading costs. The buyers for everything sale( freight, insurance , unloading and transportation) from the port of destination to his warehouse. The passing of risk occurs when the goods have passed the ship’s rail at the port of shipment.

CIF

The seller pays for the transportation to the port of shipment , loading costs, freight and insurance. That means the buyers pays the unloading costs and for the goods to be transported from the port of destination to his warehouse.

Other terms of delivery that may be used in foreign trade are: FAS( free alongside ship), CAF( cost and freight), ex ship , ex quay.

Тема №7: insurance of goods

The idea of insurance is to obtain indemnity in case of damage or loss.

While the goods are in a warehouse the insurance covers the risk of fire, burglary. As soon as the goods are in transit they are insured against pilferage, damage by water, breakage or leakage.

Particular average refers to risks affecting only one shipper’s consignment. General average refers to a loss incurred by one consignor but shared by all the other consignors who use the same vessel on the same voyage.

As it is possible to take advantage of an additional kind of insurance, only three kinds:

1. Marine insurance policies is a document, which contains the terms of insurance and can be given for such a durable period of time and for a big quantity of the goods.

2. Marine insurance Certificate is given for each consignment of goods.

3. Charter Parties is a treaty on chartering the vessel. It can be concluded for one voyage and it’s named “Voyage Charter Party”.

Тема №8: bond.

Bonds are securities issued by companies, governments and financial institutions when they need to borrow money.

Well, they usually pay a fixed rate of interest and are repaid after a fixed period, known as their maturity, for example five, seven, on tens years.

Bonds are very liquid. They can be sold on the secondary market until they mature. But of case, the price might have change.

Because of change in interest rates. For example, no one will pay the full price for a 6% bond in new bonds are paying 10%.It will be sold below par. And the opposite, a bond whose market value is higher than its face value, is above par.

The coupon, the amount of interest a bond pays, remains the same. But the yield will change.

Bond-issuing companies are given an investment grade by private ratings companies such as standard and Poors, according to their financial situation an performance.

Gilts is the name the use in Britain for long-term government bonds-gilts or gild-edged securities.