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What is the difference between CIF and FOB shipping terms?
What is the difference between a CIF and a FOB contract?
What is the difference between CIF and FOB destination Incoterms?
What does CIF mean in shipping?
Jan 15, 2024 · David Kindness. Fact checked by. Ryan Eichler. Cost, Insurance, and Freight (CIF) vs. Free on Board (FOB): An Overview. Cost, insurance, and freight (CIF) and free on board (FOB) are...
- Christina Majaski
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- 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.
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.
Jul 13, 2022 · 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 ends when they are loaded on the ...
Key Differences Between FOB and CIF. 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:
The differences between CIF and FOB shipping terms depend on which type of FOB Incoterm is used, FOB Origin or FOB Destination. CIF vs FOB Origin. Under FOB Origin, the seller must pack and clear goods for export, transport them to the port of origin and load them on the selected vessel.
