What is the difference between CIF and FOB terms?
In CIF, the seller is responsible for transporting goods to the nearest port, loading the goods on the ship and paying freight for the goods to be delivered to a port chosen by the buyer. In FOB trading, the seller is only responsible for taking the goods to the nearest port on his or her end.
What is difference between FOB contract and CIF contract?
One of the major difference between FOB and CIF is the insurance of the products as in FOB the seller does not have to purchase insurance or the products whereas in CIF the seller needs to sign an insurance contract for the products which provides a policy of insurance of at least 110% of the value of the goods.
What are CIF terms?
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.
Are FOB terms still used?
The term FOB is also used in modern domestic shipping within North America to describe the point at which a seller is no longer responsible for shipping costs….North America.
| North America | Incoterms |
|---|---|
| FOB destination or FOB destination, freight prepaid | DAP destination |
What are FOB terms?
Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB destination” means the seller retains the risk of loss until the goods reach the buyer.
What is the advantage to using CIF costing terms?
Advantages and Disadvantages of CIF – Cost insurance and Freight. The advantage to the seller is that it can often obtain cheap insurance and then build a larger amount into its selling price. The advantage to the buyer is that it does not have to worry about declaring the shipment to its own insurer.
Does CIF include duty?
CIF does not include any import duties, VAT, or taxes. It does include all export requirements. Under CIF, the seller must export and pay the costs to ship to your destination port, but you must import and pay all costs associated with the importation.
What is CIF delivery term?
Cost, Insurance, and Freight (CIF) mean that the seller delivers the goods on board the vessel or procures the goods already so delivered. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
What is the difference between FOB and CIF?
The difference between CIF and FOB is the freight and insurance costs to pay upto destination port. In case of CIF, these charges are borne by the seller and in case of FOB, they are borne by the buyer. Thats it.
What do CIF and FOB mean in shipping terms?
Cost, Insurance and Freight ( CIF ) and Free on Board ( FOB ) are international shipping agreements used in the transportation of goods between a buyer and a seller. They are among the most common of the 12 international commerce terms (incoterms) established by the International Chamber of Commerce (ICC) in 1936.
What does FOB and CIF mean?
Cost, Insurance and Freight (CIF) and Free on Board (FOB) are international shipping agreements used in the transportation of goods between a buyer and a seller. They are among the most common of the 12 international commerce terms (incoterms) established by the International Chamber of Commerce (ICC) in 1936.
What is difference between FOB and CIF in contract law?
The important differences between FOB and CIF contract is that, FOB contract specifies the port of loading, however CIF contract specifies the port of arrival. Under the FOB contract the main duty of the seller is loading.