Exportation of the PlayStation 3 in France: incoterm choice

Résumé du document

The incoterms represent "relations and responsibilities between the seller and the buyer on an international level", considering three characteristics, which are: - Risk transfer, Cost transfer, and Vendor documents liability. We will choose the incoterms taking into consideration the transport means we want to use in trading. There are original incoterms, used when the risk transfer is made before a destination incoterm. An Incoterm defines who has the responsibility, but never indicates who has the ownership. We have selected the most appropriate incoterms in order to best export the PlayStation 3 in France, taking into consideration all the risks, main obligations, costs and documents liability associated with transport for our product.

Extraits

[...] (Here at the Taiwan airport). The Risk of losses and damages are transferred from our parent company to DEG multimedia Wholesaler at this point in time. Costs' Sharing Seller's expenses Dividing the charges between both parties Buyer's expenses Conclusion To summarise how the Playstation 3 is manufactured and transported from the Sony Warehouse in Taiwan to the whelesaler in France, I will refer to the previous diagram where the two incoterms CIP and DDU have been used As you can see the process is divided into two stages, the first stage is from the warehouse in Taiwan to the machine assembly point in Japan, the second stage is from this machine assembly point in Japan to the wholesaler in France. [...]

[...] Exportation of the PlayStation 3 in France: incoterm choice Introduction: a brief outline of the incoterms The incoterms represent “relations and responsibilities between the seller and the buyer in an international level”, considering three characteristics which are: Risk transfer, Cost transfer, Vendor documents liability. We will choose the incoterms taking into consideration the transport means we want to use in trading. There are origin incoterms, used when the risk transfer is made earlier than a destination incoterm. An Incoterm defines who has the responsibility but never indicates who has the ownership. [...]

[...] We have decided to use a third incoterm: FCA, as a back up if a product was to be returned back faulty to the Sony warehouse. As you can see from the diagram on the second page that we have a facility to order the parts directly from the Sony warehouse in Taiwan back to the wholsaler in France. It is important to Sony Video Games to maintain a good image and reputation during this process. Indicative bibliography Guide to incoterms 1990. By Jan Ramberg, edited by ICC (Paris) Incoterms in practice. [...]

[...] To resolve this problem, Sony Video Games thought of using a third incoterm in order to directly send the spare parts of the SONY warehouse to Taiwan as far as France. For this transport, the most appropriate incoterm is the FCA. When FCA incoterm is used: for all means of transport Departure sale Situation of our company: neither the buyer, nor the seller ( the transport expenses are shared between Sony (parent company) and Sony Video Games in case the products are returned or order of spare parts. Scheme: The main obligations Sony and DEG Multimedia must agree on the exact delivery terms. [...]

[...] Sony assumes all of the costs including insurance. DDU incoterm seems to be the most appropriate incoterm to use for transporting final products from Japan to France. When DDU incoterm is used: for all means of transport Arrival sale Situation of our company: SELLER Scheme: The main obligations DDU: Risk transfer/ Cost transfer/ Vendor Documents liability Secondly we chose DDU. This was to transport the end product from Japan to Paris by plane. We assumed all the risk with this Incoterm so it was important that it was less likely of problems occurring. [...]