CIF
CIF is commonly used for large deliveries, including oversized goods, that are shipped by sea. The seller has the responsibility of loading the shipment onto the vessel. The seller covers the cost of shipping, and insurance. The seller also obtains the necessary documentation, licenses, and inspections that may be required.
The specific definitions vary somewhat in every country, but both contracts generally specify origin and destination information that is used to determine where liability officially begins and ends. They also outline the responsibilities of buyers to sellers, as well as sellers to buyers.
Benefits of Services
Cost, insurance, and freight and free on board are international shipping agreements used in the transportation of goods between a buyer and a seller.
They are part of a set of 11 Incoterms set up by the International Chamber of Commerce.
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.
Benefit for Buyers
- Convenient shipping
- No handling freight details
- Seller pays all costs
- Easy and straight forward
- No responsibility until delivery
Definition
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FOB
Under a FOB agreement, the supplier assumes responsibility until the goods are loaded onto the shipping vessel. This means they pay for the goods to be transported to the port and onto the vessel. As such, the seller has a limited set of responsibilities under the contract.
The goods are considered to be delivered into the control of the buyer as soon as they’re loaded onto the ship. When the voyage begins, the buyer then assumes full liability, including transport, insurance, and additional fees. The buyer is also responsible for unloading the goods from the vessel.2
Benefits of Services
This type of shipping contract is more flexible than a CIF. That’s because the buyer can negotiate a cheaper price for the freight and insurance with a forwarder of their choice. In fact, some international traders seek to maximize their profits by buying FOB and selling CIF.
Benefit for Buyers
- Control over shipment
- Cheaper if well organized
- Custom clearance is done by Seller
- Early Title transfer
Description
Sevices Provide
Projected Timeline
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Need Help?
Buyers in need of expert guidance and support can confidently reach out to Stoixwing Energy for personalized solutions, reliable energy resources, and a seamless procurement experience.