Recall that the founder of Ethical Coffee, Inc., recently sold the company to a retired Wall Street investment banker, who loves coffee but has little knowledge of the coffee industry. In considering whether to engage Premier Global Transportation, speak on the need for due diligence, standard contract provisions regarding shipment/risk of loss and quality/sampling of green coffee, and vendor onboarding.

In one section describe the necessary due diligence your team needs to conduct before engaging Premier Global Transportation. Be sure to consider potential risks associated with third parties in the supply chain.

Note: Ethical Coffee is not publicly traded but falls under the FCPA definition of "domestic concern."

Premier Global Transportation acts as an agent/broker and shipper.

• As your agent (or broker, depending on the transaction), Premier Global Transportation will be charged with evaluating samples, tasting, and quality control, from the point of purchase to the delivery of the coffee beans in the United States.
• Your contract with Premier Global Transportation will cover transportation of green coffee beans from the farms were the coffee beans are grown to the United States, to ports in New York, New Orleans, and San Francisco.
• Please explain the following types of standard contract provisions. In your explanation, please state how the provisions help allocate the risk of loss and risk of price fluctuation between coffee sellers and buyers.
  • Risk of Loss - Transfer of Ownership
    • FOB
    • FAS
    • FOT
    • CFR/CIF
  • Quality Control Samples - Sampling of Coffee to Determine Quality
    • SAS-NANS
    • SAS-PSS
    • SAS-Arrival
    • SAS-Replace (SASR)

Explain the needed onboarding process with Ethical Coffee along with the scorecard Ethical Coffee will use with Premier Global Transportation.