CIF terms, 07 disadvantages to exporters

CIF terms, strengths for a seller

This website deeply digs about Inco terms 2020, finding differences with each terms, advantages and disadvantages for both buyers and sellers.

In this post, we points out the merits under CIF terms for buyers.  The following 07 points explains such advantages for exporters when contracting CIF delivery terms:

01. Under CIF rules in export import trade, one of the main advantages to exporter is that he is liable to undertake the risks of movement of goods only till the goods are loaded in to the Vessel.  So the exporter holds minimum risk under CIF delivery rules.

02. The seller undertakes ocean freight arrangements (main carriage) under CIF terms, in turn the seller control over main carriage by nominating a shipping carrier as per his own decision and choice. This is a merit for exporter under CIF terms of delivery. 

03. Another advantage for seller is that under CIF delivery rules, in an import export business, the exporter arranges minimum insurance up to the named place contracted with the buyer.   So, the exporter can make sure on safety of goods by contracting with a marine insurance company.

04. In an import export trade, exporter under CIF terms need not worry about government rules and regulations for import process, import duties, and other import regulations in buyer’s country. This is an advantage for exporter under CIF terms.

05. Another merit for exporter is that under CIF delivery rules, the seller is not responsible to undertake the risks and costs of moving goods from destination named port to final destination of buyer.

06. Since exporter decides shipping carrier of main carriage under CIF, the exporter holds rights with shipping carrier for getting Export General Manifest (EGM) details and other shipping tracking information. This is a benefit for exporter under CIF terms.

 07. Another advantage for exporter under CIF terms is that the unloading risk and cost under CIF terms of delivery is with the importer and the seller of goods is free from any loss or damage of goods when unloading at final destination of buyer.


Hope the above information about advantages under CIF terms for exporter helps you. 

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