Cost, Insurance and Freight

The International Chamber of Commerce has created International Commercial Terms known as Incoterms. The purpose for their creation is to have pre-defined terms to help organization shipping, streamline the process, ease any potential problems and create universal terms accepted by many countries around the World. One of the Incoterms that is popular in international container shippingis Cost, Insurance and Freight (CIF).

The terms of this type of shipment can sound complex, but it is really simple to understand. In a Cost, Insurance and Freight shipment, it is the Seller who plans for the ocean freight transportation of the cargo to the port of destination. The seller also ensures that the documents are given to the buyer, so that the buyer can get the cargo when it arrives at the destination port. The seller assumes all of the responsibility for shipping the container, but once the container is transported in the ocean, the buyer assumes all responsibility. The terms are very similar to another Incoterm called Cost and Freight (CF). The difference is that in Cost, Insurance and Freight terms, it is the seller who pays for the freight insurance until the freight reach the port of destination.

Usually, there are no duty costs when shipping on Cost, Insurance and Freight terms. However, it should be noted that some nations might have a different definition of the Cost, Insurance and Freight terms. Consult with a logistics provider to find out the best ways to ship under Cost, Insurance and Freight terms.