CIF (Cost Insurance and Freight)
Published by:
Netherlands Chamber of Commerce, KVK
< 1 min read
CIF is an appropriate Incoterms® rule for transport by water of bulk and general cargo. The transfer of costs and risk takes place at different times. Seller must take out transport insurance.
Seller arranges and pays for:
- All transport up to the agreed port of destination.
- Export formalities and documents.
- For the buyer, transport insurance with minimum cover for transport by water.
Buyer arranges and pays for:
- Unloading at the port of destination, if nothing else was agreed in the contract of carriage.
- Transport from the agreed port of destination to the final destination.
- Import formalities and local import documents.
Suitable for:
- Trade within and outside the EU.
- Transport of bulk and break bulk cargo by ship.
- Payment via Letter of Credit or documentary collection.
Not or less suitable for:
- Container transport, as the containers cannot be opened to check whether the seller has delivered correctly.
- Transport by air, road, or rail.
Transfer of risk from seller to buyer:
- Once seller delivers the goods on board the vessel at the port of departure, as with FOB. The buyer carries the risk during sea transport.
Points of attention:
- For water transport only.
- The transfer of costs (port of arrival) and risk (port of departure) takes place at different times.
- Agree exact location at the destination port.
- Seller must take out transport insurance with minimum coverage for water transport.