The main commodity that is exported through Hong Kong airport is electrical equipment. Electrical wire making equipment tops the list among all the electrical equipment exported from Hong Kong International Airport . This is the equipment that is used in the manufacturing of electrical wires.
Price per piece
This equipment is exported in sets. The price of each set is 50,000 Chinese Yuan. The conversion rate is 0.17 Canadian Dollar is equivalent to 1 Chinese Yuan as of November 2013. This amount will be Canadian $8500. Each set has 5 pieces of equipment. This implies that the price of each piece of equipment is $8500/ 5 = Canadian $1700.
Quantity of product to be exported
The quantity of the electrical wire making equipment ranges between 50 and 60 sets per month. This implies that the average number of sets is 55. The quantity of the electrical equipment is 55 * 5 = 275 units.
Total weight of shipment
The weight of this electrical equipment is 97 kilograms. This implies that the total weight of each set is 5 * 97 kilograms = 485 kilograms. Given that the airport exports an average of 55 sets per month, the total weight exported in a month is 55 * 485 kilograms = 26,675 kilograms. The airport ships the commodity once per week. This implies that the weight of each shipment is 26,675 kilograms/ 4 = 6668.75 Kilograms.
Total cube of shipment
Each set measures 9.75 cubic meters. Since 55 sets are exported in a month, their volume will be 55 * 9.75 cubic meters = 536.25 Cubic meters. Hong Kong International Airport exports this volume four times in a month. This implies that the volume for each shipment is 536.25 cubic meters/ 4 = 134.0625 Cubic meters. However, the airport allows for 137 cubic meters due to the volume of external steel cover and offloading space.
INCOTERM chosen
The International commercial terms that have been chosen are those which are aligned with commodities of high value but those of relatively low volume. For any cargo that is considerably large, a full charter is employed by filling a cargo airplane. If it may not fill an entire plane, a partial charter is used.
Port of Loading
The port of loading that is used for this airport is Port of Hong Kong.
Port of Destination
The port of destination is Port of Montreal, Canada.
Total Freight amount in Canadian dollars
At the airport, freight charges for cargo are charged on the basis of weight and destination. The charges are Canadian $5.55 per a kilogram of cargo. The weight of each shipment is 6668.75 kilograms, on average. This implies that the total freight amount is Canadian $ 5.55 * 6668.75 kilograms = Canadian $37011.56.
Insurance premium
The insurance premium in Hong Kong airport is usually low. This is because the airport provides quick services and its security are advanced in comparison to that its competitors. The premium amounts to Canadian $0.25 per a kilo of cargo. The insurance premium for each shipment will be Canadian $0.25 * 6668.75 kilograms = Canadian $1667.19.
Profit margin
The profit margin for each set is set at 12% of its total cost. The total price for each shipment is Canadian $8500 * 55 = Canadian $467,500. The total cost will include freight charges and insurance premium. This will be given as $467,500 + $37011.56 + $1667.19 = Canadian $506,178.75. The profit margin is 12% * $506,178.75 = Canadian $60,741.45
Total Export price
The total export price is given by the sum of the total cost and profit margin. This will be given by Canadian $506,178.75 + Canadian $60,741.45 = Canadian $ 566,920.20.
References
Alibaba. (2013, November 20). Electrical Wire Making Equipment . Retrieved from http://www.alibaba.com/countrysearch/CN/electrical-equipment.html: http://www.alibaba.com
Greenfield, S. (2013). A Guide on Cargo. Hong Kong International Airport Guide, 19.
Hong Kong International Airport. (2011). Air Cargo Charges at Our Airport. Hong Kong International Airport Guide, 22-23.
Martins, A., & Williams, M. (2012). Cargo Handling in Asia's Leading Airports. Business Week, 34.
Townsend, P. (2012). An Overview of Hong Kong International Airport. The Wall Street Journal, 37-38.
