Assignment 5 Intro to Transportation

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We first must assume that INCOTERMS were negotiated and agreed to between Siemens and NB Power, the incoterms used would play a key role in determining where the liabilities lay

Based on David Hays statement “Frankly, Siemens is responsible to deliver fully functioning turbines to us at Point Lepreau.” We can assume one of the following incoterms was used in the contract between Siemens and NP Power.

For example, if the INCOTERMS used in the contract between Siemens and NB power were DES (Delivered EX Ship) all cost and risk associated with the shipment would be the responsibility of the seller ( Siemens) to the named destination before discharging, in this case NB Power would have no extra expense incurred relating to the shipment its self.

If the INCOTERM CIP (Carriage and Insurance Paid To) was used in the contract between Siemens and NB Power, the seller (Siemens) would arrange and pay for shipment but would not assume any risk of the main carriage. In this case the buyer, NB Power, would have all the expenses starting with the divers, cranes to lift the turbines out, man hours, refurbishment and replacement costs.

If the incoterm of the contract was DES then all costs assonated with the retrieval refurbishment or replacement of the turbines would be borne by Siemens. It would then be dependent on the contract between Siemens and Irving Equipment as to who would be responsible for the costs.

If CIP were used the cost assonated replacement of the turbines would be insured, however, the insurance premium cost would be borne by Siemens and recovery of those costs would be dependent on the contract between Siemens and Irving Equipment. The cost of the recovery effort Divers, Cranes etc would not be covered by insurance, depending on the contract between Siemens and Irving Equipment the recovery costs would be borne by Irving Equipment.

NB Power would also have to put a claim in for insurance, the insurance would only cover the cost of the...
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