Bolloré Logistics Canada and the Use of Incoterms in International Maritime Shipping Harvard Case Solution & Analysis

Bolloré Logistics Canada and the Use of Incoterms in International Maritime Shipping Case Study Solution

Best Suitable Group from the supplier and buyer’s standpoints:

Atlas mining and the Amiko mine in New Caledonia

From the point of view of seller, it tends to want buyer taking the responsibility for the merchandise’s transportation from the factory of seller. But, accoridng to buyer’s view point, the shipment of merchandise should be handled by the seller as least as far as the loading port. Based on the standpoints of both buyer and seller, the recommded Incoterm is EXW in which the risk and cost of transportation would be tranferred to the buyer of the product or services.It is highly suitable In cotermsas the ocean freight is the mode of transportation. Due to the 14000 km distnace between Trios-Rivieres and Caledonia, the seller would only be entitled or responsible to make the shipment of product available at right time and right destination for the customers. It would most likely provide a clear picture of all the buyer upfront cost. This Incoterm would be suitable for the seller, thus it represents the minimum obligation for them.

Advantages of EXW:

  • Buyer is to be in control of the arrangements and costs of shipping.
  • Being a buyer, you will have the ability to make your own decisions regarding clearance of customers.

Disadvantages:

  • Additional cost if the supplier lacks an export license.
  • You might be charged with higher custom duty cost in case of any misleading information by the supplier.

ProLab + & Clinica Alana

To satisfy both seller and buyer in the case, the best recommnded Incoterm would be FCA (Free Carrier), it is due to the fact that it provides Clinica Alana the options to select the best transportation mode it would be most comfortable with. The seller or proLab+ would be responsible to fulfil its obligations when seller would hand the products. Since, Prolab+ has been seeking to meet the requirmemnts of customer sale to make the and the Clinica Alana’ main concern was the condition of products upon its arrival at the destination, so the seller would be bearing risk and cost for the good’s shipment. Upon the delivery of the products, the risk of damage or loss would be transfer to the buyer.

Advantages:

  • Cost-effective as all the expenses are to be paid by the buyer.
  • Eliminates the issues occurrence regarding legal documentation and custom clearence.

Disadvantages:

  • As per the insurance policy, there will be no obligations.
  • All the expenses are to be paid by the seller.

Cirque Hemisphere and the Athens Theatre

Since, the congestion at port was the foremost risk, the recommended Incoterm is CFR, in which the seller or Cirque Hemisphere would be responsible to arrange transportation of the goods to the theatre, but the seller would no longer be liable to insure the shipment of the product. The responsibility over the seller for the safe shipment of product would be beneficial for the buyer, hence there is a likelihood that it would gain more contracts in the future from the similar buyer (Incoterms 2010, 2015).

Advantage:

  • Buyer does not need to arrange the carriage and avoids possible deposit payment.
  • It serves as a great way to split the responsibilities between the seller and buyer.

Disadvantage:

  • Freight has to be paid before the bill is obtained for lading and before payment by the buyer.
  • Buyers might bear risks of goods damage before delivery.

Most appropriate Incoterm group:

Atlas mining and the Amiko mine in New Caledonia

EXW tends to be the most appropriate Incoterm to be considered based on the transfer of cost to the buyer.As the seller is reluctant to take the responsibility of shipment arrangement, the seller would then only be responsible to act according to its capability of ensuring product availability on time and at right location. Similarly, there will be no obligation on the seller due to the shift of risk and cost to the buyer.

ProLab + & Clinica Alana

FCA  is best known to provide Clinica Alana with the best transportation mode as per its operational efficiency. Therefore, the seller or pro Lab+ would be responsible to fulfil its obligations as it has no issues regarding the arrangement of carriage. Thereby, the seller would be responsible for risk and cost at the time of goods shipment at the specified location.

Cirque Hemisphere and the Athens Theatre

CFR is the most appropriate Incoterm to consider with respect to the situation resulting in transferring the arrangement responsibility to Cirque Hemisphere. The provision and holding on to the responsibility of the goods delivery and its expenses will be beneficial in gaining the trust over the seller as well as the products in order to build a relation.

Price Offering:

Based on the information collected by Marc regarding the logistics costs, the offering price has been estimated for each case. The estimated price offering considering all the possible cost to case 1 is 12963.58395, for case 2 i.e. 11736.86543 and for case i.e. 3 6373.065432 as shown in the Appendix B in US dollars.

 

Appendices:

Appendix A –Recommended Incoterms

Appendix B – Estimated price

Price Estimation
Case 1Case 2Case 3
Point of origin Trois RivierisSainte JulieBoucherville
Destination Voh, New CaledoniaSantiago, ChileAthens, Greece
Equipment 40′40′ reefer40′
Pre-positioning 532.4074074277.7777778277.7777778
Outbound custom clearance38.5802469138.5802469138.58024691
Sea freight/ Port of unloading 597056762454
Terminal handling charges 870270390
Inbound customs clearance 150234270
Delivery 12307861074
Insurance11811746398
Estimated Cost 9971.9876549028.3580254902.358025
Estimated Price12963.5839511736.865436373.065432

 

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