CIF and FOB under Inco terms 2020

valign="top" width="215">

Transportation from Seller’s  premises to Load port

Seller

Seller

 

Transportation from Seller’s premises to Load port

Seller

Seller

Unloading at Loading Port

Seller

Seller

 

Unloading at Loading Port

Seller

Seller

Loading to Vessel

Seller

Seller

 

Loading to Vessel

Seller

Seller

Export documentation

Seller

Seller

 

Export documentation

Seller

Seller

Export Customs Clearance

Seller

Seller

 

Export Customs Clearance

Seller

Seller

Export Taxes and duties (if any)

Seller

Seller

 

Export Taxes and duties (if any)

Seller

Seller

Handling at Load Port

Seller

Seller

 

Handling  at Load Port

Seller

Seller

Main Carriage  (Ocean Freight)

Seller

Buyer

 

Main Carriage (Ocean freight 

Buyer

Buyer

Destination Port Handling

Buyer

Buyer

 

Import Customs Clearance

Buyer

Buyer

Import Customs Clearance

Buyer

Buyer

 

Import Documentation

Buyer

Buyer

Import Documentation

Buyer

Buyer

 

Import Taxes and Duties (if any)

Buyer

Buyer

Import Taxes and Duties (if any)

Buyer

Buyer

 

Transportation from destination port to final destination

Buyer

Buyer

Transportation from named place to final destination

Buyer

Buyer

 

Unloading at named place

Buyer

Buyer

Unloading at named place

Buyer

Buyer

 

 

Insurance for movement of goods

Seller

NA

 

               

 

2 separate posts about CIF and FOB are explained easily with simple language in this website, you may click below to read those.

 

FOB  Free On Board

 

CIF  Cost Insurance and Freight

 

 

The above information is about the difference between CIF and FOB.  You may add your thoughts below about the comparison between FOB and CIF.

 

Click here to read other delivery rules under Inco terms  

Learn practical problems and solutions in Exports and Imports

Banking rules related to Exports and Imports in India

How to open Letter of Credit, easily explained here

What does CPT mean under Inco Terms 2020?     Meaning of FCA under Incoterms 2020     EXW,Ex Works under Inco terms 2020     Inco Terms, Different stage where risks and costs transfer from Seller to Buyer     Parties involved to use Incoterms directly and indirectly     Is it necessary to use trade mark of Incoterms under Sale contract     Mention year of Inco Terms under Sale contract     Inco Terms and Sale Contract between buyer and seller     Inco Terms 2020 Rules for Delivery of Goods         Buyer or Seller? Who pays Insurance under DAP Inco terms?         Under FCA Inco terms, Insurance is paid by buyer or seller?     Under EXW Ex works, who arranges Insurance?     04 Categories of Inco Terms 2020     D Category of Delivery terms under Incoterms 2020     CIP terms of movement, Unloading goods by Buyer or Seller?        C Rules of Delivery terms under Incoterms 2020       F Rules of Inco Terms 2020E Category of Incoterms 2020  

Difference between FOB and CIF under delivery rules of ICC 2020

Cost Insurance and Freight at named location (CIF)  Vs. Free On Board at a named location(FOB)

Under FOB delivery terms, the seller completes his obligation of costs and risks under movement of goods and passes to buyer when the goods are placed to the Vessel (on board the ship).  But under CIF delivery rules, the seller transfers costs of movement of goods to the buyer when the goods arrived at buyer’s side.

The costs covered by the seller under CIF terms passes from seller to buyer when the goods arrived at named destination at buyer’s side.  But the seller under FOB is responsible to bear the cost till the goods gone onboard the vessel nominated by the buyer.

The freight payment against main carriage under CIF is liable to pay by the seller.  But under FOB, the main carriage is undertaken by the buyer.

Risks of Seller under FOB terms transfers to buyer when goods are gone onboard the vessel.  Under CIF terms, the seller’s risks passes to buyer when goods are loaded to the carrier.

As per Incoterms 2020, under CIF delivery rules, the seller is liable to cover minimum insurance cover against the goods moved from seller to buyer.  Under FOB terms of delivery, neither the party is responsible to arrange insurance as per Incoterms 2020 rules thereby either the buyer or the seller may undertake insurance as per their contract of carriage mutually agreed.

The buyer has control over deciding ocean freight, as main carriage is arranged by him and he holds strength in tracking shipment under FOB delivery terms.  But under CIF, the buyer has to depend upon the seller for getting export shipment details with shipping tracking, as the seller has control over freight under main carriage.

 

 

CIF- Cost Insurance Freight

         (named Place)

 

  FOB – Free On Board (named Places)

 

Costs

Risks

 

 

Costs

Risks

Warehouse services

Seller

Seller

 

Warehouse services

Seller

Seller

Marking and labeling

Seller

Seller

 

Marking and labeling

Seller

Seller

Packing of Goods

Seller

Seller                                   

 

Packing of Goods

Seller

Seller                                   

Loading at Seller’s premises

Seller

Seller

 

Loading at Seller’s premises

Seller

Seller


Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers