CFR vs CIF: Key Differences and Which is Right for Your Business?
This article analyzes the differences between two important terms used in shipping, CFR, which stands for Cost and Freight, and CIF, which stands for Cost, Insurance and Freight in the perspective of international trade and more specifically about the services offered by Hongocean. Both terms spell out a need for the seller to pay the shipping costs, but one of these terms is with insurance while the other is not. Under CFR, once the goods are loaded on the ship the buyer assumes liability for those goods but there is no insurance from the seller’s side. This is different from CIF, which allows the seller to provide basic marine insurance which informs the buyer that he has some security while the goods are in transit. The article discusses the responsibilities of respective parties in the global shipping logistics and how the terms state influence risk and cost distribution in the global shipping logistics.
Explanation: What Is Incoterms CIF (Cost Insurance And Freight)?
CIF (Cost, Insurance, and Freight) is one of the most commonly used Incoterms in International business where the seller is responsible for the cost of the goods, their insurance, and freight charges up to the point of shipment of goods on board a vessel and the buyer takes over all risks from that point with direct access and carriage paid. This term makes prices easy for the buyer to determine and also manage the amounts involved in the buying process while on the other side it passes more control, responsibilities and cost to the sellers. CIF defines the responsibilities and areas of coverage as well as the costs involved in shipping, and this knowledge assists companies in fashioning how they plan for and avoid mishaps in, cross-border transactions.
FOB vs. CIF: Understanding the Key Differences in Shipping Terms
In cases of overseas transportation, there are two important terms often used, known as the FOB and the CIF. These are known as Incoterms which have been developed by the International Chamber of Commerce (ICC) to explain the Exporter’s and Importer’s obligations and the transfer of risks in the course of the delivery of goods. […]
