Incoterms
CIF: Cost, Insurance and Freight
Named Place Requirement: Port of
Destination
under
CIF (short for “Cost, Insurance and Freight”), the seller delivers the goods,
cleared for export, onboard the vessel at the port of shipment, pays for the
transport of the goods to the port of destination, and also obtains and pays
for minimum insurance coverage on the goods through their journey to the named
port of destination.
The
buyer assumes all risk once the goods are on board the vessel for the main
carriage; however, they don’t take on any costs until the freight arrives at
the named port of destination.
CIF
applies to ocean or inland waterway transport only. It is commonly used for
bulk cargo, oversized or overweight shipments.
If the freight is containerized and delivered only
to the terminal, use CIP instead. If using CIP instead, insurance
coverage defaults to all-risk; however, the parties may negotiate a lower
coverage requirement.
CIF Incoterm
Obligations
Seller’s Obligations
o Goods,
commercial invoice and documentation
o Export
packaging and marking
o Export
licenses and customs formalities
o Pre-carriage
and delivery
o Loading
charges
o Delivery
at named port of destination
o Proof
of delivery
o Cost
of pre-shipment inspection
o Minimum
insurance coverage
Buyer’s Obligations
o Payment
for goods as specified in sales contract
o Discharge
and onward carriage
o Import
formalities and duties
o Cost
of import clearance pre-shipment inspection
