SCMT Final

TradeCard, created in 1994, combines document handling and payment in one process and utilizes electronic transmission of documents and guarantees payment to the exporter
True
The applicant is the importer. The beneficiary is the exporter. The advising bank is the exporter’s bank.
True
SWIFT stands for Society for Worldwide Interbank Financial Financial Telecommunication.
True
The commercial invoice _______.
-Is sent ahead of the shipment
-The same thing as a packing list
-Is the same thing as a letter of credit
-All of these
-None of these
End-Use Certificate____.
Certify that the product is going to be used for a legitimate purpose
The sentence “This merchandise licensed by U.S. for ultimate destination [country]. Diversion contrary to U.S. Law prohibited” is ___.
Destination Control Statement
Besides a contract and a receipt for goods, an ocean bill of lading is_____.
A certificate of title
Weight and dimensional packaging information is necessary in order to build pallets effectively for international shipping.
True
Which of the following are international documents?
-Commercial invoice
-Packing list
-Airway Bill
-All of these*
Looking at the percentage of revenue paid and total tons of freight hauled the following statements are true about U.S. transportation mode comparison
-Trucks account for 80% of revenue paid and about 38% of total tons hauled.
-Air account for about 5% of revenue paid and less than 1% of total tons hauled.
-Railroads account for 7% of revenue paid and about 35% of total tons hauled.
According to Eurostat 2012 statistics of fright carried in millions of tonnes railroads accounted for only about 7% of total freight hauled in Europe.
True
Economies of scale of larger ships that cannot go through Panama Canal may be substituted with a land bridge via rail from the port of Seattle to an East coast U.S. port.
True
An intermodel yard transfers containers from trucks to trains, or vice-versa.
True
A standard TEU container is 8 feet wide (2.44 meters) and 8.5 feet tall (2.59m)
True
Malcolm McLean demonstrated that it was feasible to move ocean freight in containers for about 15.8 centers per ton compared to about $5.83 per ton with conventional processes of the time.
True
In the Harmonized System of classification, an incomplete or unfinished product is classified____.
An incomplete or unfinished product is classified as the product it will be when finished.
Which of the following pieces of information does an international commercial invoice contain?
-Incoterms
-Precise description of the product
-Terms of payment
-All of these*
A forward market hedge consists of selling forward the currency that will eventually be collected from a foreign receivable.
True
The following are functional areas often classified as Inbound Logistics
Purchasing
The U.S State Department recently eliminated their foreign services division charged with assisting small and medium size U.S. companies interested in exporting to foreign countries
False
It is generally accepted that _____.
Supply chain management encompasses activities that are broader than those of logistics management.
The stated goal of the European Union is to eventually transform the euro to be a challenger to the U.S. dollar in its role as a preferred third-country currency.
True
Generally speaking, countries with scarce foreign currency resources will attempt to limit the granting of import licenses to companies that have generated export revenues and ____.
Companies purchasing goods for which no close domestic substitute is available.
Different colors of bills of ladings are used for each type of transportation.
False
The country of origin of a product is the country in which it acquired its most substantial transformation
True
In the United States, the Federal Reserve System technically fulfills the role of being a central bank
True
The IMF was created to oversee the fixed exchange rate system created by the Bretton-Woods Conference. Today it helps countries manage their balance of payments and lends them money when they experience difficulties with their balance of payments.
True
Goods in a foreign trade zone can be warehoused until they are sent to their final destination, either in the host country or to a foreign destination. If the goods are sold in the host country, they are only dutiable at the time of that transaction. If they are sold abroad, they are dutiable both to the country where they are sold and to the host country of the foreign trade zone.
False
From the view point of a seller open accounts is the best payment method
False
Packaging designed to appeal to and be functional for consumers is called
Primary packaging
The following are functional areas often classified as Inbound Logistics:
Purchasing
As a company grows in exporting sophistication, it should not become involved with an export trading company because
Customers abroad are customers of the export trading company, not the exporter
It is not possible for a shipper to insure its cargo against war damages.
False
Companies will often seek to sell or source oversea to reduce costs.
True
We discussed some basic definitions, including
-Supply chain management is the integration of business processes from end user through original suppliers that provide products, services, and information that add value for customers*
– Logistics is the management of the flow and storage of inventory so that total costs are minimized and customer services are achieved
-Logistis which can be summed us al follow the inventory
-None of these
A cargo service that allows an exporter to ship a large quantity of goods to a location not normally served by cargo airlines would be _____.
Charter airfreight service
Many ports have had to dredge channels to allow ships with drafts of up to 40 feet.
True
Shipper’s Export Declaration (SED) is a data-collection document required by U.S. government:
-Allows U.S. government to tell what products are exported from U.S. to where
-and must be sent to U.S. Customs Service
-for exports valued at more than $2,500 per item category ($500 for parcels sent through the postal system) or shipments requiring an individual Validated Export Licence
-All of these*
Ships dedicated to the transport of petroleum products are called _____.
Crude Carriers
A freight consolidator is almost always quite good at packaging a container properly, with proper dunnage and protection, but the owners of other cargo on board the consolidated container may not be as careful, and that represents a hazard.
True
The concept of general average is exclusively used in marine insurance.
True
Stable countries representing the greatest percentage of world trade all have _____ currencies.
floating
The converted tanker ship ideal X carried 58 containers on April 26, 1956 from the Port of Newark; loading each container on board in about 7 minutes.
True
The following are types of International aircraft
-Passenger Aircraft
-Freighter Aircraft
-Combi-Aircraft
-Quick Change Aircraft
-All of these*
Intermodal containers sometimes collapse in rough seas
True
At Lloyd’s, individuals assuming (insuring) risks are on their personal fortunes called ________.
Bespoke Names
The idea that containerized ocean cargo needs to take a shortcut across a landmass by rail has resulted in the development of bad bridges.
False
Ships too large to pass through the Panama Canal are called_____.
Post-Panamax Ships
Rationale: Unseaworthy vessels and improper packing are never insurable. Coverage against strikes and other civil disturbances can be with a special endorsement.
True
A certificate of insurance is a document provided by the insurance company of the exporter that attests that the goods are insured during their international voyage. This certificate is obtained only at the request of the importer, and for transactions under certain Incoterm terms of trade, such as CIF and CIP
True
The faster it moves the greater the transportation spend
True
Some countries regulate primary package sizes by requiring them to be multiples of simple metric units
True
Sometimes a third bank, in addition to the issuing bank and the advising bank, becomes involved with a letter of credit. This bank is called a______.
correspondent bank (confirming bank)
The commercial invoice_______:
-Is the same thing as a letter of credit
-The same thing as a packing list
-Is sent ahead of the shipment
-All of these
-None of these*
(The commercial invoice is sent with the shipment, it is separate from a letter of credit, and it has no connection to an export license.)
An import license is usually provided by an independent laboratory or independent inspection company attesting to composition of certain shipped products
False
An airway Bill fulfills same functions as ocean bill of lading but for air freight and is always a straight air waybill.
True
Weight and dimensional packaging information is necessary in order to build pallets effectively for international shipping
True
The most common container is the 40-foot container, designed to hold goods loaded through its two doors.
True
A TEU is a twenty foot containers
True
International exchange rates began to float _____.
-And it changed the role of the International Monetary Fund
-in 1971
-At the end of the gold standard
-All of these*
The International airfreight business is regulated by ______.
-the Federal Aviation Administration
-Aeroflot
-the Civil Aeronautics Board
-the Civil Air Patrol
-None of the above *
(correct answer is the International Air Transport Association and the International Civil Aviation Organization)
Rich countries dominate decision-making in the IMF because voting power is determined by the amount of money that each country pays into the IMF’s quota system. It’s a system of one dollar, one vote. The U.S. is the largest shareholder with a quota of 18 percent. German, Japan, France, Great Britain, and the US combined control about 38 percent. This is the argument from the Global Exchange an international human rights group for abolishing the IMF.
True
A medical device is not legal in country A but is in country b. Despite being restricted from country A, the product is allowed to go through the foreign trade zone of country A on its way to country B.
False
The U.S. State Department offers assistance to small and medium size companies interested in exporting to foreign countries.
True
The Harmonized Commodity Description and Coding System, also called Harmonized System (HS) uses up to 13 digits. The first 6 digits are the same in all countries, while the last 4 are country specific used to differentiate different subcategories of main product
True
The International Maritime Dangerous Goods Code regulates the shipment of dangerous goods by ocean.
True
Most duty is collected ad valorem which means
It is based on the value of the import
A commercial invoice created from a letter of credit should conform to spelling(?) used on the letter of credit to avoid bank discrepancy charges
True
An exporter can conduct its international business in a manner similar to the way it and most companies conduct domestic business by using ___.
an open account
A certificate of insurance is a document provided by the insurance company of the exporter that attests that the goods are insured during their international voyage. This certificate is obtained only at the request of the importer, and for transactions under certain Incoterm terms of trade, such as CIF and CIP.
True
A consular invoice is a regular commercial invoice printed on stationery provided by a country and visa-ed by its consulate in the exporter s country.
True
The amount of duties charged by U.S. Customs depends on:
-The type of goods; their classification.
-The value of the goods; their valuation.
-The country from which the goods originated; the rules of origin.
-All of these.*
An Airway Bill fulfills same functions as ocean bill of lading but for air freight and is always a straight air waybill.
True
Dimensional weight calculations are the same for both ocean and air shipments.
False
According to the United Nations ocean export commission all international shipments must have an insurance policy.
False
In the U.S. rail accounts for 33% of all freight in tons moved, but only 7% of transportation revenue paid.
True
The European Community has recently introduced the concept of ___ that run trains straight through from major ports to cities such as Milan and Vienna without changing locomotives and crews at each border.
Freight corridors
Another land bridge is across Russia to connect Europe and Africa.
False
Oversize cargo is shipped on a “flat rack” container.
True
An intermodel yard transfers containers from trucks to trains, or vice-versa.
True
An intermodel yard transfers containers from trucks to trains, or vice-versa.
True
In order for an importer to come under the scope of informed compliance, it must show that it has exercised reasonable care in the filing of its Customs entries.
True
If the exporter and the importer agree that a transaction will be in the currency of the exporter’s country, the exporter then bears all the risks of exchange rate fluctuation.
False
Special Drawing Rights (SDRs) of the IMP are an artificial currency whose value is determined by the value of a basket of four currencies: the euro, the Japanese yen, the U.S. dollar, and the British pound.
True
The U.S. State Department recently eliminated their foreign services division charged with assisting small and medium size U.S. companies interested in exporting to foreign countries.
False
The International Bank for Reconstruction is known as the World Bank and was founded after the Bretton Woods Conference to help countries rebuild their infrastructures after WWII.
True
In addition to being a contract of carriage and a receipt for the goods, an ocean bill of lading is
a certificate of title
Logistics in the 1980’s was split between Inbound Logistics and Outbound Logistics.
True
An exporter can conduct its international business in a manner similar to the way it and most companies conduct domestic business by using ___.
an open account
An export management company earns its revenue through ___.
Sales commissions
In its absolute form, the exchange rate determination theory of Purchasing Power Parity.
-is rarely noticeable, even for identical products sold worldwide
-All of these*
-is impossible to achieve
-says that exchange rates should reflect the price differences of each and every product between countries.
-says that the exchange rate should equalize price differences of similar products between countries.
At Lloyd’s, individuals assuming (insuring) risks are on their personal fortunes called ___.
Bespoke Names
The three functions of correct packaging are
to protect goods in transit, to facilitate proper handling of goods in transit, and fulfill the shipper’s customer service strategy.
Documentary collection is a process by which the exporter asks bank to protect its interests in importing country by not releasing documents (specifically bill of lading which is certificate of title to the goods) until importer meets certain requirements
True
The importer’s bank is called the ___.
Issuing bank
Drafts are sometimes used to provide customers (importers) access to lower cost money in the exporter’s home country.
True
End-Use Certificates ___.
certify that the product is going to be used for a legitimate purpose
Export quotas can be used to control scarce resources or prices of products for which a country has a monopoly.
True
In most cases, an intermodal bill of lading ___.
is a straight bill of lading when the name of the consignee is specified.
An intermodal yard transfers containers from trucks to trains, or vice-versa.
True
A standard TEU container is 8 feet wide (2.44 meters) and 8.5 feet tall (2.59m).
True
An exporter and an importer can agree on three possible alternatives when choosing the currency in which a sales contract will be paid
-The exporter’s country’s currency
-The importer’s country’s currency
-A third country’s currency
-All of these
SDR, an artificial currency, is designed to supplement the U.S. dollar in its role as the international currency.
True
EAR stands for Export Administration Regulations, and it contains the Commerce Control List, which details which commodities and products can and cannot be shipped to certain countries.
True
Letters of credit are used:
-As a standby to guarantee a perform obligation
-As a method of financing export/import of goods
-As a device to guarantee payment obligation
-All of these*
A Certificate of Origin must be signed by the importer’s chamber of commerce.
False
The country of origin of a product is the country in which it acquired its most substantial transformation.
True
Because agents tend to be individuals or very small firms, governments in some countries put them under ___.
labor law
It is possible to find insurance for improper packing.
False
Global railroads are important for expediting trade and every country in the world uses the same gage (width of tracks).
False
A packing list always accompanies a shipment.
True
Cigna is a marine insurance company. Lloyd’s and the International Underwriting Association are involved in forms of insurance.
True
Successful supply chain strategies cannot be expected to simultaneously lower costs, increase service levels and reduce inventory quantities.
False
Most cargo tends to be shipped by air in its
secondary packaging
Letters of credit are often used in global transactions to be banks, a credible third party into the process when sellers and buyer really do not know each other well.
True
A standby letter of credit is similar to a “simple” letter of credit except for ___.
-It generally has a much longer validity period
-It usually applies to more than one shipment from the exporter to the importer
-It allows the exporter to extend an open account to the importer, using the letter of credit only if the importer doesn’t meet its obligations
-All of these*
A certificate of inspection is a document signed by independent third party attesting to authenticity and accuracy of a shipment.
True
Dimensional weight calculations are the same for both ocean and air shipments
False
An export license can be used by a country to control the outflow of certain goods.
True
Another land bridge is via North Korea from a land bridge from South Korea over Russia’s Trans-Siberian railway to Europe.
False
Non-tariff barriers may appear in the form of ___.
multiplying the number of documents required for importing products; slowing down Customs clearance processes; requiring a special sticker to be applied to an imported product
The tax an importer must pay in order to be allowed to let goods into the country is called a duty.
duty
Tariffs can be calculated
-ad valorem
-All of the above *
-as a fixed amount per unit imported.
-in a mixed system of a fixed amount per unit imported plus a percentage of the value of the goods imported.
The Bank for International Settlement was created after World War I to manage Germany’s war reparation payments. Since then, it has evolved into a major international institution, providing support to Central Banks, and acting as a clearinghouse between central banks
True
Since most airports are geographically close to large cities, their hours of operations are generally limited by ____________________ constraints.
Noise
Intermodal containers sometimes collapse in rough seas.
True
An intermediary that purchases goods in the exporting country and resells them to a customer in a foreign country is called a(n) ___.
distributor
In 1999 the U.S. Congress passed the Ocean Shipping Reform Act (OSRA) which allowed for private confidential contracts between shipping lines and shippers. OSRA _________ the legal collective rate making rights of global ocean conferences.
weakened
Argentina can produce 1 ton of meat (beef) using 0.1 years of labor. It can also produce 1 automobile using 2 years of labor. In order to produce 1 ton of beef, the United States uses 0.2 years of labor. It can produce an automobile using 1.5 years of labor.
Argentina has an absolute advantage in the production of beef.
The term “project cargo” refers to cargo
that is outside of the normal realm of what shipping companies handle in terms of weight, size, or destination
According to John Waite, chief surveyor of the Salvage Association, the biggest hazard(s) for container ships is/are
Fire