Who books the ship, and where risk leaves a Karachi mill: MT433's Unit 4 analysis rejects a DDP quote hiding [$4,444] a container and settles on FCA. Searches like "mt 433 unit 4 assignment example", "mt433 unit 4 sample" and "mt433 unit 4 example" land here.
What a finished MT433 Unit 4 trade terms analysis looks like
Four pages with one comparison table and a timeline drawn as a strip from mill to warehouse. The table puts the three quotes in columns and sets beside each the importer's own cost of the same services: ocean at [$4,650] a box, cargo insurance near [$252], duty, entry fees, the 2025 surcharge row and drayage. CFR comes out [$410] a container dearer than FOB plus the importer's own freight, a small premium for handing routing to the mill. DDP comes out [$4,444] a box above the importer's own cost stack, about [$62,216] across fourteen containers a year. The strip marks where each term moves risk and cost: on board at Karachi for FOB and CFR alike, and at the Charlotte dock, duty paid, for DDP.
How a MT433 Unit 4 example is structured
After the facts of the sale, each term is treated under the same four questions: who arranges carriage, where risk passes, who clears each border, and who insures. CFR receives the closest reading because its two points fall in different places; the mill pays freight to Savannah, but risk moves to the importer once the container is on board in Karachi, so a loss in the Arabian Sea falls on a buyer who chose neither ship nor route. DDP is priced, then set aside for reasons beyond price: the mill would become importer of record, needing a US resident agent and a bond, and the buyer would lose sight of what is declared on goods it sells. The recommendation is FCA at the Karachi container terminal, using the 2020 option under which the importer's carrier issues an on-board bill of lading.
Three prices for one box
The mill's offer letter is summarized with its date and validity. All three prices cover the same [22,000] towels, so each difference between them pays for a service, a risk or a margin, and the analysis sorts every difference into one of those three.
CFR's two points
Freight paid to Savannah, risk passed at Karachi: both points appear on the strip, with a note that CFR obliges nobody to insure. The importer's own cargo policy, near [$252] a box, is added to the CFR column for that reason.
What the delivered price hides
Against the importer's own cost stack of [$4.748] a towel, the DDP quote carries [20.2] cents more. Beyond price, the mill would declare classification and value on goods the importer sells, and a detention at entry would still empty Charlotte shelves.
What no Incoterm settles
Title, payment timing and remedies for defective goods belong to the sales contract, not to the rule. One paragraph says so, because the mill's draft letter implied that choosing DDP would also move payment to delivery.
FCA with an on-board bill
Delivery to the importer's carrier at the Karachi terminal ends the mill's risk when it hands over the sealed box. Incoterms 2020 let the importer instruct that carrier to issue an on-board bill of lading, which the mill's bank requires under its letter of credit.
Where marks go in MT433 Unit 4
Terms analyses usually earn their marks on precision about points, and naming a rule without its named place and edition is a frequent first deduction. MT433 graders commonly probe CFR and CIF, where the seller pays freight beyond the point at which risk has already passed; papers stating that risk travels with the freight payment misread the rule. Treating Incoterms as though they transfer ownership draws comment. A delivered-duty quote accepted for convenience, with no comparison against doing the work in-house, forfeits the cost argument this unit tends to want. Credit rises with a dollar figure for each difference between quotes and a sentence on who holds the import obligations under each term. A recommendation fitted to how the sealed box actually moves reads as understanding.
Get a MT433 Unit 4 example written to your instructions
Paste the quotes or the case exhibit for your Unit 4 analysis, with named places, prices, payment terms and the rubric. We write a first sample free, returned in 24-48h, that prices each term against the buyer's own costs, marks where risk passes and names the Incoterms edition throughout.
MT433 Unit 4 questions, answered
Why is CFR riskier for a buyer than it looks?
Because the seller pays freight to the destination port while risk passes to the buyer at the port of loading, once the goods are on board. A loss at sea is therefore the buyer's, on a ship the seller chose. CFR also obliges nobody to insure, so a buyer relying on the seller's freight arrangement may be carrying an uninsured cargo without knowing it.
Can a foreign seller act as importer of record under DDP?
It can, but it takes arrangements many overseas mills lack. A non-resident importer of record generally needs a customs bond and a resident agent in the United States for service of process, and it declares classification and value on goods the buyer will sell. Many buyers prefer to control those declarations, which is one reason the example sets DDP aside.
Do Incoterms decide when the buyer pays?
No. Incoterms allocate delivery, costs, risk and customs duties between seller and buyer, while title, payment timing and remedies for defects belong to the sales contract. A buyer who picks DDP expecting to pay on delivery needs that written into the contract separately, which is exactly the confusion the mill's letter created in the example.