What do fob and cif mean

With Ex works, the seller makes the product available at a designated location, and the buyer incurs transport costs. With Free on Board, the seller is responsible for the goods until they are loaded on a shipping vessel; at which point, all liability transfers to the buyer. The terms are also used for inland and air shipments. CIF means they will pay for the cost, the insurance and the freight, where CNF means the consignee is responsible for the insurance only.

CIF Cost, Insurance, Freight A pricing term indicating that the cost of goods, insurance, and freight are included in the quoted price. Duty is calculated by adding all costs together. See below for example. Cost and freight CFR and cost, insurance, and freight CIF are terms used in international trade for the shipping of goods by sea.

Cost, Insurance, and Freight CIF is an expense paid by a seller to cover the costs, insurance, and freight against the possibility of loss or damage to a buyer's order while it is in transit to an export port named in the sales contract. CIF means they will pay for the cost, the insurance and the freight, where CNF means the consignee is responsible for the insurance only.

Last Updated: 1st May, Habibur Gribin Professional. The reason is very obvious. Seller must pay the costs and freight includes insurance to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the ship. Aristeo Sajeev Professional.

What is FOB short for? The acronym FOB, which stands for " Free On Board " or "Freight On Board," is a shipping term used in retail to indicate who is responsible for paying transportation charges. It is the location where ownership of the merchandise transfers from seller to buyer.

Tatevik Aporta Professional. What is the opposite of FOB shipping? Freight collect means the person receiving the shipment is responsible for all freight charges. They also assume all risks and are responsible for filing claims in the case of loss or damage.

Freight prepaid is the opposite. Fabiane Pedersen Explainer. Who is responsible for shipping damage? Improper packaging is implicated in a very large fraction of shipping issues. The receiver, also often noted as the consignee, is responsible for documenting any loss or damages that might result from the carriage and delivery of freight. Apply market research to generate audience insights.

Measure content performance. Develop and improve products. List of Partners vendors. The terms are also used for inland and air shipments.

CIF is considered a better way to buy goods for those who are new to international trade. It might also be a better option for new traders who have small cargos.

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. The seller is also responsible for paying insurance for the goods. It is better to buy FOB for those who are already familiar with international trade. These traders have their own forwarding agents and logistic agents in place at the port where the buyer loads the goods to be imported.

In FOB trading, the seller is only responsible for taking the goods to the nearest port on his or her end. This location is indicated after FOB, and it is important to accountants, as goods become assets to the buyer on the day they reach that location. Any transfer, picking up, and loading charges interlinked with loading the item onto the ship. The Cost of protecting the cargo, but the purchaser has the option of not buying insurance. Any additional import duties, taxes, and costs interlinked with clearing customs.

Why Using CIF? Why not Using CIF? Buying export licenses for the item. Offering inspections of products. Packaging charges for exporting the shipment.

Fees for customs clearance, duty, and taxes. Covering the Cost of any harm or destruction to the items. Unpacking the item at the port of the terminal. Shipping the item within the terminal and to the delivery site. Custom duty charges are interlinked with importing the products. Charges for shipping, unloading, and delivering the items to the final destination. Shipping In FOB transport, the purchaser is accountable for booking a ship to reach the final destination.

Claim on Goods In FOB, the salesperson has no right of claim on the items and the right of termination in transit; The delivery company is accountable to the purchaser. Costs Going with the FOB option for transporting is suggested as the purchase gets control over the delivery process and the charges are cheaper. Advantages of Using FOB Agreement The salesperson knows the details of his state and can freight the items by keeping in mind the terms and conditions of the shipment company.

The buyer deals with the shipping document as they are the one who chooses the delivery carrier and gets to keep payment documents that have been made for shipment transportation. If a purchaser cannot clear payment, then the seller can recover the products before they give them to the buyer, even if it is in shipment. FOB is an excellent logistic way as it ensures a secure manner and reasonable costs. It is considered a customary agreement by most purchasers and sellers and thus has enormous acceptance.

They will cover any unexpected outcomes even if the items do not reach them. In some cases, the seller includes margin costs to their Free On Board costs.