CIF Terms

CIF (Cost, Insurance and Freight) is a commonly used trade term in international trade, meaning 'Cost, Insurance and Freight'. It means the seller is responsible for chartering a ship and booking space, transporting the goods to the designated port of destination, and paying freight and insurance premiums. The risk division is based on the goods passing the ship's rail at the port of shipment, but the seller must arrange cargo insurance and pay the premium. CIF applies to sea and inland waterway transport and is often used in combination with letters of credit. Usage scenarios: the seller wishes to control transportation and insurance, and the buyer wishes to obtain a CIF quotation. Precautions: the seller must pay attention to the insurance coverage and insured amount (usually 110% of the invoice value), and the buyer must bear the risk after the goods pass the ship's rail and the unloading charges at the port of destination. Differences from FOB and CFR: under FOB the buyer is responsible for transportation and insurance, under CFR the seller is responsible for transportation but the buyer for insurance, while under CIF the seller is responsible for both transportation and insurance. Difference from CIP: CIP applies to multiple modes of transport and has different insurance requirements.