FOB or CIF? What changes for an importer
FOB (free on board) and CIF (cost, insurance and freight) are two Incoterms rules (International Commercial Terms) that cover most export orders. The difference is who books the sea freight, and the answer depends on your forwarder.
FOB, Free On Board
We deliver the goods on board the vessel at the Florida port. You, through your forwarder, book and pay the sea freight and the insurance. The risk passes to you once the goods are on board.
CIF, Cost, Insurance and Freight
We book and pay the sea freight and a minimum insurance to your destination port. A detail many buyers miss: under CIF the risk still passes to you when the goods are loaded in Florida, not when they arrive.
Which one to choose
- Choose FOB if you already have a forwarder with good rates and want control of the booking.
- Choose CIF if you want one price to your port and less coordination.
- Ask about insurance either way: the CIF minimum may be less cover than you want.
General information about the Incoterms® 2020 rules of the International Chamber of Commerce, not legal or customs advice. Your pro forma states the agreed terms.