CIF or C&F terms in trade and shipping

Today we will talk about a new type of trading contract. We talked about x word before, FOB price, but today we are going to talk about a relatively well-known commercial contract, which is c&f or CFR, which is related to the term “cost and freight”, which means that when I import the goods, this freight charge is the cost of the product The complex and the shipping cost of the product.

What does CIF or C&F mean?

This indicates that the seller is responsible for: transporting the goods, packing the goods into containers, then transporting the goods to the port of shipment, and then moving the goods from the port of shipment to the port of destination agreed upon by the importer. The seller bears full responsibility for the goods and their insurance until the goods arrive at the port of destination agreed upon by the importer.

Are there advantages and disadvantages?

The importer has some disadvantages, namely: that the goods are in the hands of the importer and the exporter does not own anything. The exporter chooses the shipping route or shipping method until it reaches the destination port. Suppose you have a factory or production line. As an importer, you want to control when the containers you want to get arrive. For example, whether the seller takes the contract or the seller takes the contract automatically, often the seller secures the freight he requested and undertakes the freight and pays for it. However, if you use c&f to import and use fob, this allows you to select the mode of transport, be it fare or its own speed, this applies to fob, but in the case of cFR, it is the source of everything, and the responsibility lies with them until The shipment arrives at the port of destination.

Cif Unlike insurance, the term agrees that the seller, importer, or buyer insures the goods in transit, and thus the contract becomes CIF, the third type of commercial contract that every importer must understand.

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