O-LevelCommerceGlobal trade7100/21 · Oct/Nov 2022 · Q316 Marks

Over 50% of all the world's visible trade is transported by sea in shipping containers.

(a)Define visible trade.[2]
(b)Describe how containers can be used as warehouses.[2]
(c)Explain two ways a customs authority might enforce trade restrictions on goods coming into a country.[4]
(d)Firms need to consider several factors, such as security, when deciding to use sea transport to move their goods. Evaluate two other factors a company should consider before using sea transport. Which one is more important? Give reasons for your answer.[8]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2022). The mark or mark type is shown in brackets.

[2] (a) Trade in the import and export (1) of goods/tangibles (1)
[2] (b) To store/keep goods or products (1) e.g. example of goods (1); Standard/variety of sizes (1) to store all types of goods (1); Variety of types (1) e.g. refrigerated/temperature controlled (1); Made of steel/metal (1) less damage/theft to goods/goods protected/safe (1); Sealed/locked/closed (1) not opened until destination (1); Can be stacked (1) in port areas (1) for imported goods (1)
[4] (c) Embargoes (1) banning the entry of some imported goods completely (1); Quotas (1) imposing physical limits on the number/volume of goods imported (1); Tariffs/duty (1) adding a tax to the cost of imported goods (1); Licensing (1) permit needed before goods are permitted into the country (1)
[8] (d) Factors: Cost - if it is too expensive it will lower profit margin; Destination - landlocked countries cannot use sea transport, does the ship call at the port the company wants; Type/nature of goods – e.g. if goods have a short shelf life/are urgent or need fragile handling, it would be better to choose air transport; Distance - longer distances can mean greater risk of damage, more opportunity for theft; Trans-shipment of goods between different forms of transport at ports/airports – can add to costs / cause delays; Laws/regulations/duty – may increase costs / cause delays at ports; Urgency/reliability/efficiency of transport method – will the cargo arrive in the time required; Currency fluctuations – changes in exchange rates can affect final sea freight rates; Quantity of goods – large amounts of goods can be carried by sea; Weather can delay goods or result in losses; Documents - such as bill of lading needed to be completed. Evaluation: The decision to use sea transport will depend on the distance, urgency and type of goods to be transported, but cost will be most important factor because a company will need to cover its costs and make a profit, otherwise it will not be worthwhile transporting the goods.