CIF stands for Cost, Insurance, and Freight, which is an international shipping agreement used when freight is shipped via sea or waterway. Under CIF, the seller is responsible for covering the costs, insurance, and freight of the buyers shipment while in transit. The buyer is responsible for any costs once the freight has reached the buyers destination port. CIF is commonly used for large deliveries, including oversized goods, that are shipped by sea.
Here are some key features of CIF:
- The seller is responsible for the cost of shipping, insurance, and freight charges until the goods are loaded onto the vessel for the main carriage.
- The buyer assumes all risk once the goods are on board the vessel for the main carriage, but they dont take on any costs until the freight arrives at the named port of destination.
- CIF applies only to ocean or inland waterways and is commonly used for bulk cargo, oversized, or heavyweight shipments.
CIF and FOB are both shipping agreements that outline whether the buyer or seller has the responsibility for the freight during the shipment. These terms are important since they indicate which parties are responsible for insurance, freight charges, and which party is held responsible in the event the goods are damaged during transport.
