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- Under CIF contracts, the seller assumes responsibility for costs and liabilities until the shipment arrives at the destination, at which time the risk is transferred to the buyer. Under FOB contracts, the buyer is responsible for shipping and other costs, as well as insurance as soon as the goods are loaded onto the vessel and during the voyage.
People also ask
What is FOB vs CIF?
What is the difference between FBO and CIF?
What is free on board (FOB) & cost insurance & Freight (CIF)?
Should you buy CIF or fob?
Jan 15, 2024 · Key Differences . The main differences between CIF and FOB lie in who assumes responsibility for the goods during transit. Under a CIF agreement, the seller assumes the costs and risks...
- Christina Majaski
- 1 min
Sep 5, 2018 · What’s the difference between FOB and CIF in shipping? FOB and CIF both describe overseas shipping agreements that specify whether the buyer or the seller is responsible for the goods while they are in transit¹. Defining FOB (Free On Board)
Understanding the distinctions between FOB (free on board) and CIF (cost, insurance, and freight) is crucial for navigating the complexities of international trade and making informed decisions that align with your business's logistical and financial objectives. Here's a table summarizing their key differences: .
- A guide to shipping terms and incoterms. Cost and Freight (CFR), Cost, Insurance and Freight (CIF) and Free on Board (FOB) are three of the terms included in the International Chamber of Commerce’s International Commerce Terms (Incoterms).
- Incoterms – All you need to know. What are incoterms? The Incoterms are a series of pre-defined commercial terms designed to help prevent confusion in foreign trade contracts by clarifying the obligations of buyers and sellers.
- Cost and Freight (CFR) CFR is among the most popular Incoterms used, however, as highlighted by our Incoterm expert Bob Ronai, it is often used without reference to any version of the Incoterm rules.
- Cost, Insurance and Freight (CIF) The difference is minimal between a CIF agreement and a CFR agreement. Under both terms, the seller assumes the responsibility for all of the arrangement and transportation costs for shipping products to the agreed-upon destination port while the buyer assumes all further responsibilities, including those relating to cost once the ship has reached port.
Jul 13, 2022 · CIF vs. FOB: The Main Differences. The main difference between Incoterms FOB and CIF is whether the buyer or seller pays for the main carriage of the goods. Under FOB, both the cost and the risk transfer at the point of export. Under CIF, the seller’s responsibility for the goods ends at the port of destination, but their risk for the goods ...
Oct 12, 2023 · Key Takeaways. FOB and CIF are common Incoterms that define cost and risk responsibilities for buyers and sellers in international trade. FOB transfers responsibility for goods to the buyer at the port of shipment, while CIF transfers risk at the destination port after covering insurance and freight costs.
