Pushalong is a successful freight forwarding agent. It is used by many traders when they import freight. Pushalong owns aircraft and a fleet of trucks.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2014). The mark or mark type is shown in brackets.

1. [1] 1 mark for transported goods.
2. [3] Any 3 points × 1 mark each • To arrange transport for goods between seller and buyer • To arrange the documentation for the transport of goods • To arrange customs clearance • To arrange any storage needed • To pack goods into containers • To move goods overseas / within the country • To keep goods secure. Any other relevant point.
3. [4] Any four points (which covering both making and receiving payments) × 1 mark each – • Various means of payment are available such as cheques, credit transfer, direct debits and standing orders (2 max) • Bank drafts are issued on the bank • Payments abroad may be made using letters of credit / bills of exchange • Banks issue debit cards to make immediate payments • Banks issue credit cards which allow clients to postpone payment • Pushalong can pay in money using paying-in slips • Clients may transfer money to Pushalong using Internet banking • Banks will provide various bank accounts for Pushalong to deposit surplus funds • Check creditworthiness of customers. Any other relevant point.
4. [2] Any two reasons × 1 mark each • Fast means of transport • Increased global trade • Larger aircraft capable of carrying greater volume • More routes available for carrying freight • Better means of carrying containerised goods by air • More goods that can bear the cost of air transport • Consumers becoming richer. Any other relevant point.
5. [6] Level 2 (4-6 marks) Has discussed whether or not Pushalong should continue to use its own transport or hire transport when required, has mentioned any other information required and has given a reasoned opinion. (One-sided argument = 4 marks max. No penalty if no further information is given.) Pushalong owns its own aircraft and a fleet of trucks. It obviously sends goods to traders in the home market and also handles imported and exported goods. If it owns transport, it must have been economically viable to do so. There must have been sufficient business generated to pay for this transport. If it is considering hiring other companies' transport, perhaps there has been a downturn in business. We do not know. We do not know the possible volume of future traffic. Using your own transport has certain advantages. The goods are better supervised. Delivery times and places can be arranged to suit the customer. Deliveries can be made to several customers along one route when using road transport. Specialised transport can be bought e.g. refrigerated trucks. Both the trucks and the aircraft can be used to advertise the firm's business. On the other hand, there is the high capital cost of purchasing. Leasing might be an option in the future. There are high running costs e.g. fuel, labour and there is a danger that the transport may be underused or return loads cannot be obtained. Pushalong will have to weigh up whether or not the money spent on owning transport can be better used elsewhere in its business. If Pushalong has enough business to continue to own its own transport, it should do so. Customers are likely to be happier to have their goods transported under the control of the company they are dealing with, rather than a company hired by Pushalong. If needs be, Pushalong should look for other customers who can make use of its services. Level 1 (1-3 marks) Has commented on whether or not Pushalong should continue to use its own transport or hire transport with / without an opinion. If Pushalong continues to use its own transport it has greater control. It will be able to supervise the goods. It may be cheaper to offer this service. It can use its transport when and where it wishes. It will have to pay quite a lot of expenses. The cost of buying vehicles is expensive. Fuel costs are high. It will need to employ labour. The transport could breakdown.
6. [4] Any two reasons × 2 marks each • The capital cost of owning ships and maintaining them would be prohibitive • Pushalong is not a shipping company and there is no information to suggest that it moves goods in bulk • Pushalong offers services to many traders who are likely to want small quantities transported • Pushalong does not have enough business to make the ownership of ships an economic proposition • Pushalong may be operating in a land-locked country • Ships are too slow for the kind of cargo handled. Any other relevant point.