CIP Vs CIF under Inco terms 2020
CIP and CIF delivery terms – Confusing?
CIP means Carriage and Insurance Paid to a named destination agreed between buyer and seller
CIF means Cost Insurance and Freight to a named destination contracted by seller and buyer mutually.
How does CIP differ from CIF? What are the difference between CIF and CIP?
CIF delivery rules are designed by ICC under Incoterms 2020 for the movement of goods by Sea and Inland Waterways, as it is called Marin restricted Inco term. However CIP delivery term may be used for all modes of transport (Air, Sea or Land).
So the main carriage under CIF movement of goods is by sea. So CIP is not used for movement of goods by sea and inland waterways.
CIP is widely used to move goods from Warehouse to Warehouse, movement of LCL cargo, shipments under break bulk etc. especially to Dry ports and intermediary ports. CPT modes are used widely used for the shipments by air also. CIF delivery rules are widely used for the movement of goods by sea with destination to a port in buyer’s side.
Under CIF, the seller transfers risks on movement of goods to buyer immediately upon goods are gone onboard the vessel or barge. Under CIP terms, the delivery takes place when goods are handed over to the carrier contracted by seller, where the risks are transferred from seller to buyer.
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CIF- Cost Insurance Freight
(named Place)
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CIP – Carriage and Insurance Paid
(named Place)
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Costs
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Risks
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Costs
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Risks
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Warehouse services
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Seller
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Seller
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Warehouse services
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Seller
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Seller
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Marking and labeling
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Seller
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Seller
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Marking and labeling
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Seller
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Seller
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Packing of Goods
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Seller
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Seller
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Packing of Goods
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Seller
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Seller
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Loading at Seller’s premises
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Seller
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Seller
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Loading at Seller’s premises
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Seller
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Seller
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Transportation from Seller’s
premises to Load port
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Seller
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Seller
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Transportation from Seller’s
premises to Load port
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Seller
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Seller
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Unloading at Loading Port
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Seller
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Seller
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Unloading at Loading Port
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Seller
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Seller
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Loading to Vessel
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Seller
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Seller
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Loading to Vessel/Aircraft
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Seller
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Seller
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Export documentation
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Seller
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Seller
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Export documentation
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Seller
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Seller
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Export Customs Clearance
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Seller
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Seller
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Export Customs Clearance
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Seller
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Seller
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Export Taxes and duties (if any)
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Seller
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Seller
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Export Taxes and duties (if any)
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Seller
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Seller
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Handling at Load Port
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Seller
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Seller
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Handling at Load Port
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Seller
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Seller
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Main Carriage (Ocean Freight)
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Seller
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Buyer
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Main Carriage
(Ocean Freight/Airfreight)
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Seller
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Buyer
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Destination Port Handling
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Buyer
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Buyer
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Import Customs Clearance
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Buyer
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Buyer
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Import Customs Clearance
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Buyer
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Buyer
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Import Documentation
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Buyer
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Buyer
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Import Documentation
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Buyer
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Buyer
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Import Taxes and Duties (if any)
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Buyer
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Buyer
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Import Taxes and Duties (if any)
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Buyer
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Buyer
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Transportation from named place to final destination
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Buyer
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Buyer
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Transportation from named place to final destination
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Buyer
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Buyer
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Unloading at named place
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Buyer
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Buyer
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Unloading at named place
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Buyer
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Buyer
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Insurance
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Seller
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NA
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Insurance for movement of goods
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Seller
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NA
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Two web posts related to CIF and CIP explaining both terms in detail in simple language are available below to read. You may click below to know easily to understand both term CIP and CIF:
CIF Cost Insurance and Freight
CIP Carriage and Insurance Paid To
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