Fisherman International has been in the local Chile aquaculture industry for nearly fourteen years. They raise salmon and trout for local markets, and have recently negotiated a deal with a small fish processing plant that distributes under a major product label in Chile. Fisherman International has contacted the government and enrolled in small business export initiatives. This has enabled the company to attend aquaculture conferences abroad and offered them the opportunity to network and make contact with Marys Mussels & More, a Canadian seafood importer. Marys Mussels & More was eager to negotiate a contract for 2 tonnes of Chile salmon to distribute to a number of customers throughout the North America. Payment of credit was arranged by a Canadian bank. The Fisherman International requires the documents to export ; a commercial invoice, the insurance policy, a marine bill of lading, and a certificate of quality. Fisherman International has also arranged to have their fish inspected by a nationally accredited standards organization. In the supplier agreement, both parties agree that Fisherman International will pay freight to Hamilton Port Authority (HOPA) and will also provide insurance on the shipment. Once the salmon has been delivered to HOPA, Marys Mussels & More will assume all responsibility. The Chile Food Inspection Agency reports to Fisherman International that the fish to be exported is of superior quality, with a fat content of 11 percent. The certificate of quality includes a code for superior quality and also states a color code that is standard to the Salmon scale. Colour coding is a common practice in the fish industry and provides a method of standardization for something as subjective as colour. Both in production and sales, colour is the most important quality parameter for salmon. Salmon buyers can request information on the colour of a delivered lot in the form of a number corresponding to a colour number on the Roche scale. Another salmon colour reference is the colour number on the Salmon scale. Fisherman Internationals bank, acting as their export advisor, contacts the Company to tell them that the letter of credit has fallen though because the certificate of quality is vague and it cannot be ascertained if the shipment has passed its quality certification. The documents were delivered directly to the buyer for payment. Marys Mussels & More insists on inspecting the shipment upon arrival. Marys Mussels & More is not an experienced salmon importer and usually deals with Spanish Blue Fish and Irish Char. Upon Marys Mussels & More inspection they claim that the fat content of the stock is much higher than is claimed in the quality inspection. They reject the sale and will accept substitute goods but are claiming damages for loss of profit. Fisherman International management wonders if they need to rethink their exporting strategy.

Taking at look the material characteristics and traffic management, read the case on Fisherman International and answer the questions below. With the goal to reduce any potential transportation risks and legal liability, make sure to refer to freight regulations in your response

1. Based on your knowledge of international commercial terms and the material outlined in the case, which Incoterm would best represent the terms of sale between Fisherman Internationa and Marys Mussels & More? Given your answer, explain the responsibilities of each party. (7 marks)

2. Outline things that both companies need to consider when transporting the salmon shipment from Chile to Canada. (7 marks)

3. Considering the movement of large shipments, describe your thoughts on the importance of incoterms and how to include in supplier transactions. (6 marks)