Thursday, October 23, 2014

Cost, Insurance and Freight (CIF) Definition

CIF means cost, insurance and freight.it means seller/trader has to pay the cost of shipment up to the ship, insurance cost of cargo and freight cost up to destination port , and provide the buyer with the documents necessary to obtain the goods from the carrier. Other way Cost, Insurance and Freight (CIF) is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.The seller’s responsibility ends when the goods are safely placed on the ship as from that point on, the risk during ocean transit is covered by the mandatory insurance. So we can say CIF means insurance and freight will pay seller.
Difference Between CIF & FOB?
The crucial difference between an FOB and a CIF agreement is the point at which responsibility and liability transfer from seller to buyer. With an FOB shipment, this occurs when the shipment reaches the port or other facility designated as the point of origin. With a CIF agreement, the seller pays costs and assumes liability until the goods reach the port of destination chosen by the buyer.