What does FOB and CIF stand for?
What does FOB and CIF stand for?
The abbreviation CIF stands for “cost, insurance and freight,” and FOB means “free on board.” These are terms are used in international trade in relation to shipping, where goods have to be delivered from one destination to another through maritime shipping.
What does it mean when someone says FOB?
free on board
FOB stands for “free on board” or “freight on board” and is a designation that is used to indicate when liability and ownership of goods is transferred from a seller to a buyer. Free on Board: Free on board indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.
What does CIF mean?
Cost, insurance, and freight
Cost, insurance, and freight (CIF) is an international shipping agreement, which represents the charges paid by a seller to cover the costs, insurance, and freight of a buyer’s order while the cargo is in transit. Cost, insurance, and freight only applies to goods transported via a waterway, sea, or ocean.
Is FOB or CIF better?
Buyers generally consider FOB agreements to be cheaper and more cost-effective. That’s because they have more control over choosing shippers and insurance limits. CIF contracts, on the other hand, can be more expensive. Since the seller has more control, they may opt for a preferred shipper who may be more costly.
What is the opposite of FOB?
With a CIF agreement, the seller is liable for the goods during transit, and with a FOB, the buyer is liable for the goods during transit. Other than that, there is not a major difference between the two.
What is FOB Alibaba?
Free on Board (FOB) is an Incoterm which dictates the shared responsibility between buyer and seller. A standard FOB arrangement states that the responsibility for the goods remains with the seller as far as the port selected for shipping.
What is FOB price in export?
FOB Value = Ex-Factory Price + Other Costs (b) Other Costs in the calculation of the FOB value shall refer to the costs incurred in placing the goods in the ship for export, including but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, et cetera.
What is FOB China?
You purchase goods from a supplier in China and agree to FOB shipping terms. The next three steps of the process are carried out at the supplier’s expense. Your goods are packaged and loaded onto a truck (or another form of transportation) at the supplier’s warehouse (or another facility).
What does CIF China mean?
cost and freight
Under CIF, the buyer takes over ownership of the merchandise only at the port of destination. The seller is responsible for the cost and freight and ownership handover takes place at the destination port.