( To bring legal knowledge and up-to-date legal information to its citizens, Hainan High People’s Court carried out on-site Q&A activities about law. Lucy is a judge assistant of Hainan High People’s Court who volunteered to help, and Ms. Green is a visitor. Right now, Lucy is having a face-to-face talk with her. )

 

Lucy: Good morning. What can I do for you?

Green: Good morning. My husband and I are running a small wholesale business. About a month ago we mailed our catalogue and and leaflets to some prospective dealers abroad and recently one of them from Canada requested for CIF Shanghai quotation. I’ve learned from dictionary that CIF stands for cost, insurance and freight. We know how to determine cost, but don’t have any idea about freight in international transportation. Would you show me how to calculate the amount on freight and insurance?

 

Lucy: Sure. It’ll be my pleasure. By the way, where is your business?

Green: Right here in Haikou.

 

Lucy: OK. First of all, I’ll explain how goods are transported by sea from Haikou to Canada so as to give you a rough idea about what must be included in freight. First, goods are picked up at your business in Haikou and are transported to Shanghai. Then the goods are deposited in a warehouse or port depository for inspection by custom officials. Finally the goods are loaded on board a ship and are delivered by sea to a seaport of Canada.

Green: So in this case, the freight should include the inland carriage as well as the maritime carriage.

 

Lucy: Yes. But it’s not that easy to determine the maritime carriage. It varies much from liner term to voyage charterparty and to time charterparty. 

Green: What do you mean by charterparty?

 

Lucy: A charterparty is a contract enter into by the shipper and the carrier with respect to the transportation of goods from one place to another.

Green: Under the liner term, should I, as the shipper, sign a contract with the carrier before the goods are put on board the ship?

 

Lucy: Yes. You may sign a contract with the carrier or you may not. After the goods are loaded on the ship, the carrier issues a set of B/L, bills of lading to the shipper. That’s the evidence of contract of carriage between the shipper and the carrier. It functions as a contract in case there doesn’t exist a formal contract between the shipper and the carrier.

Green: That’s clear. Thank you. But how about insurance? How much will it cost?

 

Lucy: Under CIF or CIP term, the insured amount is customarily 110% of CIF or CIP price.

Green: So that’s 10% more than the total contracted sum. But what is the insurance premium? How much is it?

 

Lucy: Sorry I don’t know it for sure. I suggest you consult the insurance company for that.

Green: I’ll do it. Thanks a lot.

 

*words and expressions

port depository                            港口仓库

custom officials                            海关官员

inland carriage                             内陆费用

maritime carriage                           海运费用

liner term                                      班轮条款

voyage charter-party                     航次租船合同

time charter-party                  定期租船合同

shipper                                       托运人、发货人

carrier                                          承运人

B/L ( bill of lading )                     提单