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In CIF terms, the seller clears the goods at origin places the cargo on board and pays for insurance until the port of discharge at the minimum coverage. Even though the seller pays for insurance during the main carriage, the risk is transferred to the buyer at the time the goods are on board. The term is used for ocean and inland waterway ...
- What Is Cost, Insurance, and Freight (CIF)?
- Understanding Cost, Insurance, and Freight
- The ICC and Cost, Insurance, and Freight
- CIF vs. Free on Board
- Example of Cost, Insurance, and Freight
- The Bottom Line
Cost, insurance, and freight (CIF) is an international shipping agreement, which represents the charges paid by a seller to cover the costs, insurance, and freight of a buyer's order while the cargo is in transit. Cost, insurance, and freightonly applies to goods transported via a waterway, sea, or ocean. The goods are exported to the buyer's port ...
The contract terms of CIF define when the liability of the sellerends and the liability of the buyer begins. CIF is only used when shipping goods overseas or via a waterway. The seller has the responsibility for paying the cost and freight of shipping the goods to the buyer's port of destination. Usually, exporters who have direct access to ships w...
CIF is one of the international commerce terms known as Incoterms. Incoterms are common trade rules developed by the International Chamber of Commerce (ICC) in 1936.The ICC established these terms to govern the shipping policies and responsibilities of buyers and sellers who engage in international trade. Incoterms are often similar to domestic ter...
Cost, insurance, and freight (CIF) and Free on Board (FOB) are both international shipping agreements but have distinct differences between them. Each type of contract will cover different circumstances and much depend on your experience with international trade.
As an example, let's say that Best Buy has ordered 1,000 flat-screen televisions from Sony using a CIF agreement to Kobe, a Japanese port. Sony has delivered the order to the port and loaded the product onto the ship for transport. Once loading has been completed, the risk of loss is transferred from Sony to Best Buy. In return, Sony has purchased ...
Cost, insurance, and freight (CIF) is an international shipping term that describes the seller's responsibility for the cost of shipping, freight charges, and insuring the cargo being shipped via ocean or waterway. CIF means that the seller is responsible for the costs of transporting the cargo and obtaining insurance to protect the buyer from any ...
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What is CIF risk transfer?
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What is CIF insurance & how does it work?
Cost, Insurance and Freight (CIF) - Incoterms® 2020 Rules [UPDATED 2024] Cost, Insurance and Freight (CIF) is an Incoterm rule that is identical to the CFR Incoterm rule except in one aspect: insurance. Even though the risk transfers to the seller upon loading the goods on board the vessel, in CIF, the seller is obliged to take out insurance ...
Apr 12, 2024 · CIF (Cost, Insurance, and Freight) Responsibility for the goods: The seller is responsible for delivering the goods to the destination port, covering transportation costs, insurance during the main carriage, and export clearance. Transfer of risk: Risk transfers from the seller to the buyer when the goods pass the ship's rail at the port of ...
Cost Insurance and Freight (CIF) Use of this rule is restricted to goods transported by sea or inland waterway. In practice it should be used for situations where the seller has direct access to the vessel for loading, e.g. bulk cargos or non-containerised goods. For containerised goods, consider ‘Carriage and Insurance Paid CIP’ instead. Seller […]
Oct 4, 2023 · There are 11 trade terms available under the Incoterms 2020 rules that range from Ex Works (EXW), which conveys the least amount of responsibility and risk on the seller, to Delivered Duty Paid (DDP), which places the most responsibility and risk on the seller. The Incoterms 2020 Rules: Chart of Responsibilities and Transfer of Risk summarizes ...
Incoterms 2010 dictates that the CIF Incoterm, or “Cost, Insurance and Freight”, is exclusive to maritime shipping. Under CIF, the seller is responsible for the cost and freight of bringing the goods to the port of destination specified by the buyer. CIF risk transfer takes place when the merchandise is loaded onto the shipping vessel and ...
