Andrew Morton

Andrew Morton, customs and traffic coordinator at the Central Ontario University, in Toronto,had just received a call from MelissaDowning, finance managerat Canadian Marine Lines in Vancouver. It was April 3, and Melissa informed Andrew that representatives from Transport Canada had held up a shipping container because a uni versity shipment from Shanghai had not been labeled and documented in accordance with regulations stipulated in the Transportation of Dangerous Goods Act. Andrew was particularly concerned because there were a number of other consignees of goods in the container, and he recognized that he needed to act immediately to resolve the situation.

CENTRAL ONTARIO UNIVERSITY

Central Ontario University was one of Canada's largest universities, with approximately 1,200 faculty and ahnost 25,000 students. Research was an integral part of the uni versity's mission, andmost full-time facultywere engaged actively in research projects.

Andrew Morton was the university's customs and traf fic coordinator, which was part of the university's pur chasing department. He was responsible for assisting fac ulty and s ff with inbound and outbound transportation arrangements, including domestic shipments, imports,

Company (Shouwu) in Shanghai, China, FOB destina tion, freight prepaid. Shouwu was selected because they produced the chemical with the purity that Peter required. When Peter placed his order, Shouwu's sales representa tive, Haiyu Zhao, assured him that the shipment would be sent in compliance with the international maritime law and it would comply with Canadian regulations regarding the transport of dangerous goods.

Andrew first became aware of the shipment on March 15, when he received a bill of lading from Shouwu that indicated that shipment was expected to reach the Port of Vancouver in early April. He was concerned that a dec laration of dangerous goods did not accompany the bill and the university could be held liable for any incidents once it entered the country. Consequently, Andrew de cided to call MelissaDowning at Canadian Marine Lines, who would be handling the shipment in Vancouver. He informed her of the dangerous nature of the shipment, the shipper, the name of the vessel, the bill of lading number, the shipping company in China, and the port of origination. Andrew also prepared a package containing the appropriate shipping labels and documents so that the shipment could be legally transported from Vancouver to the university.

Later that same day, Andrew called his contact at Transport Canada, Sheryl Henderson, to inform her of the situation. Sheryl indicated that Transport Canada's policy was to hold Canadian importers fully liable for any and all violations of transport of dangerous goods regulations, even if the fault lay with the shipper. She expected that customs inspectors would isolate the con tainer when it arrived and that the shipment could be delayed several days.

Peter was also able to get a copy of the invoice that afternoon. He found that the order value was $7,650 and it had been paid in full two months earlier.

Melissa contacted Andrew three days later to report that over a teleconference that morning Haiyu Zhao had claimed that the shipment was not hazardous but con tained only common, nontoxic household chemicals. Andrew now wondered if the shipment had been inten tionally misrepresented.

exports, internal equipment moving, and addressing of claims for lost or damaged shipments. The university did not have a central receiving facility for incoming freight, and all shipments were delivered by the carrier directlyto the unloading dock of the building indicated on the order. A formal university shipping procedure documented re sponsibilities of partiesinvolved ineach transaction, such as the receiver, recipient, and document matcher.

THE BROMINE PENTAFLUORIDE SHIPMENT

Six months earlier, Peter Goris, a faculty member in the Department of Earth Sciences, placed an order for supply of bromine pentafluoride (BrF5). Bromine pentafluoride is a colorless to pale yellow liquid chemical that is highly corrosive and reactive. It canbe used as an oxidizer and a fluorinating agent in making fluorocarbons. However, breathing bromine pentafluoride fumes can causekidney, liver, and lung damage.

Peter was conducting advanced research that required bromine pentafluoride of exceptional purity to be used in his experiments. Using the university's low-value purchase order process, which allowed users to deal directly with suppliers for purchases under $1,000, he placed an order for bromine pentafluoride with Shouwu International Trading

ARRIVAL OFTHE SHIPMENT

On April the 3rd, Andrew received a telephone message from Melissa Downing that the container with the ship ment of bromine pentafluoride had arrived and was being isolated by Canada Customs inspectors. As Andrew had feared, the shipment had been improperly identified on theshipping documents by the shipper as a nonhazardous substance. Melissa indicated that the container had be gun incurring demurrage and handling costs, which were

$44.90 and $43.00 per day, respectively. Furthermore, it appeared that there were other shipments in the same shipp g container, possibly foodstuff and personal items, and there could be claimsand other costs associated with holding up these shipments.

Later that afternoon, Andrew received the following e-mail from Melissa:

Andrew, I just received a call from one of the consignees of goods inthe container being held up in Vancouver due to this shipment from China. The company is Kohlpec Canada in Montreal and the contact person is Jason Kohl. Apparently the goods they have in the container are for Walmart, which plans to assess them a late penalty if the shipment is delayed further. Walmart has also threatened to cancel their next order. It is increasingly clear that you may be sued for damages if we can't get this problem resolved. It looks like there are 21 consignees in the container with our goods. Get back to me with how you intend to handle this situation.

Andrew recognized that he had to take steps to remedy the situation quickly. He felt that his earlierdealings with Sheryl Henderson had gonewell under the circumstances and that she recognized that he had reacted in a respon sible and timely manner.

As Andrew considered what could be done regard ing the immediate situation, he also wondered what steps could be taken to avoid similar problems in the future. The directorof purchasing, GeorgeKerr, was aware of the situation andhad asked Andrew to implement appropriate changes to the university's purchasing and transportation policies by the end of the month.

Based on the case answer the following:

Q1: In paragraph 3, Of the section entitled; "THE BROMINE PENTAFLUORIDE SHIPMENT", ...it states that a declaration of dangerous goods did not accompany the bill (of lading)... This statement is a mistake because

Question 1 options:

1)Marine shipments don't require a separate dangerous goods declaration, only that the proper tdg information is on the bill

2) Actually, this statement is not a mistake, a multimodal dangerous goods form with shippers declaration is required.

3)Since it was an intermodal shipment no identification of dangerous goods is required under TDGR

4)Andrew would not receive an original of the bill of lading; only the shipper gets the original and the carrier gets copies.

Q2) Assuming that FOB (port of departure) is the Incoterm used, what would be a the most advisable incoterm to use to prevent liability on behalf of the college?

Question 2 options: 1)FCA Schenker Whse Shanghai (Incoterms 2020) because our agent would become the shipper and would do it right.

2) DDU Central Ontario University(Incoterms 2020) - because the shipper would be responsible up until they unloaded the cargo

3) CIP Freight Terminal Toronto (Incoterms 2020) - because all risk insurance covers damage

4) CIF Port of Vancouver (Incoterms 2020) - because all risk insurance covers liability for marine shipments.

Q3)The sales contract for the dangerous goods stipulated that they be shipped "FOB destination, freight prepaid". Statements like "FOB destination" and "FOB origin" are common and are: Question 3 options:

1) a proper use of Incoterms 2020

2)an improper use of incoterms 2020 because FOB is a marine term and it must state the port of departure as the named place

3)not Incoterms, they expressions widely used from the American UCC (Uniform Commercial Code) for domestic contracts

4) not Incoterms, they are contract terms used in the UN CISG (convention for contracts on the International sale of goods

Q4) If the Shipper is the only one who has access to the goods and is the only one who has the ability to label, package and document the goods, can the Central Ontario University be held responsible for damages? Question 4 options: 1)No the shipper is responsible for compliance and only they are responsible.

2)No, the importer cannot be held responsible for the actions of others that are outside of their control

3)Yes, under TDGR act Sec. 5, "no person shall ...import dangerous goods unless..."

4)Yes, TDGR 6.1 States: persons handling dangerous goods need to be trained or supervised in accordance

Who were the parties who acted irresponsibly in this case? SELECT ALL

Question 5 options:

1)Peter Goris who abused the low value purchasing process for purchases of less than $1000.00

2)Sheryl Henderson of Transport Canada for holding up the container, for holding Andrew responsible for goods that were not his responsibility and for causing demmurrage charges for Central Ontario Univ.

3)Haiyu Zhao for not properly complying with the international and Canadian regs as promised and lying about it.

4)Andew Morton for not taking steps to remedy the situation immediately The 21 other consignees including Jason Kohl who putting goods at risk and possibly delivering them late to Wal-Mart, losing their business