CIF Felixstowe (Cost, Insurance and Freight Felixstowe) CIF terms on the basis of the destination port being Felixstowe UK. They are fairly common international commerce terms (incoterms) that were … It is commonly used for bulk cargo, oversized or overweight shipments. In most cases of FOB, liability and title possession shifts when the shipment leaves the point of origin. Examples are requiring presentation of a policy but not a certificate of marine insurance; inserting nonsense words and requirement because “that is how the have always done it”. Until the goods are fully loaded onto a transport ship, the seller bears the costs of any loss or damage to the product. Under CIF, the seller is responsible for the cost and freight of bringing the goods to the port of destination specified by the buyer. International Shipping CIF acronym meaning defined here. Cost, insurance and Freight (CIF), maritime condition. FOB saves buyers money and provides control, but CIF helps sellers have a higher profit. This is a trade term meaning that the seller must arrange for the carrying of goods by sea to a destination port as well as provide the buyer with any necessary documents to receive the goods from the carrier. They must also give the buyer sufficient notice of delivery and provide proof of delivery and loading. Given the nature of containerized cargo, which remains unopened until destination, it would be nearly impossible to know when merchandise gets damaged in the event that it does. As with the other “C” rules, a good choice for transactions involving letters of credit. Once the freight loads, the buyer becomes responsible for all other costs. Refer to CPT, obviously excepting the tip on the buyer arranging insurance. CIF stands for "cost, insurance and freight" in shipping. more Incoterms Definition The offers that appear in this table are from partnerships from which Investopedia receives compensation. CIF applies to ocean or inland waterway transport only. Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer? Once loading is complete, Best Buy becomes liable for all costs associated with transporting the ordered goods to their final destination. The disadvantage to the buyer can be that the insurer may well not be too enthusiastic about meeting any claim. CIF Incoterms® meaning There are 11 Incoterms® rules in total, and CIF – standing for cost, insurance and freight – is one of four that relate only to waterbound transportation. This makes CIF unsuitable for containerized cargo. Other typical expenses include customs duties, taxes, and the shipment of goods to their final location. The transfer of risks also takes place at that time, in other words, the critical point of costs is equal to the critical point of risk transfer, just like FOB. Note that this insurance covers the buyer’s risk, because risk will pass from the seller to the buyer before the main carriage. What Is Cost, Insurance, and Freight (CIF)? For example, the parties to a contract must state the locale of the governing law for their terms. CIF shouldn’t be used for air or land transportation, or for containerized goods. It clearly eases the buying of goods across national boundaries, especially so where distance is involved. Under CIF terms, the seller is responsible for specific protections for an order. Are you interested to become a member of the Alfa Logistics Family? In most cases, the seller's obligation ends once cargo loading is complete. CNF and CIF are more secure than CAD. Usually, exporters who have direct access to ships will use CIF. ‘cost, insurance, freight’, a special type of sale of goods. The advantage to the buyer is that it does not have to worry about declaring the shipment to its own insurer. definition, used by a seller to indicate that the price quoted includes the cost of the merchandise, packing, and freight to a specified destination plus insurance charges. Meaning of FOB? Cost, insurance, and freight (CIF) is a method of exporting goods where the seller pays expenses until the product is completely loaded onboard ship. If using CIP instead, insurance coverage defaults to all-risk; however, the parties may negotiate a lower coverage requirement. The seller's responsibilities include: The seller must deliver the goods to the ship within the agreed-upon timeframe. CIF is one of the international commerce terms known as Incoterms. The detailed articles on CIF and DDP with simple language have been mentioned in this web blog separately. This typically will be an original insurance policy covering just that transaction or a certificate issued by the insurer under the seller’s existing open marine policy. CIF is considered a more costly option when buying goods whereas FOB shipping relieves the seller of responsibility once the goods are shipped. CIF means, Cost, Insurance and Freight (paid up to the destination mentioned). Uniform Commercial Code) but with international applications. The seller is not obliged to arrange insurance for pre-carriage in the export country or carriage in the import country unless this is specified elsewhere in the sales contract. Sony delivers the order to the port and loads them onto the Yantian Express. When purchasing internationally, the seller is responsible for exporting the cargo and shipping it until they arrive at the destination port, while insuring the cargo throughout the voyage. Note that some countries do not permit CIF imports, requiring the buyer to insure with an insurer in its own country. Purchasing export licenses for the product, Covering the cost and contracts of moving or carrying the goods, Insurance to protect the value of the order, Covering the cost of any damage or destruction to the goods. Both of these will normally show the seller as the “insured” or “assured” and will require the seller to endorse the document on the reverse such that the buyer or any bona fides holder with an insurable interest in the goods at the time of loss or damage occurred can claim. Our HQ will contact you as quickly as possible to initiate the membership procedure. However, a buyer may stipulate that the seller is responsible until the goods reach a port of import or even their final destination. In common practice, the CFR Incoterm is often preferred by buyers if they are able to secure better cargo insurance coverages. 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