What is FOB and CFR (CIF)?
Usually we accept in our cooperation with customer 2 terms: FOB or CIF (C&F)
Meaning of these terms giving below:
FOB (Free On Board)
A trade term requiring the seller to deliver goods on board a vessel designated by the buyer. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail.
When used in trade terms, the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier.
Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.
In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Osaka or FOB Yokohama.
In fact FOB means the buyer is responsible for the freight and other costs and risks.
This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.
CIF (Cost, Insurance and Freight)
The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's side. Buyer is responsible for the import customs clearance and other costs and risks. In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example CIF Dubai or CIF Los Angeles.
The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.
C&F (Cost and Freight)
It is the same as CIF, only without insurance.
CFR (Cost and Freight)
It is a modern name of C&F.
This information should be clarified by the buyer prior to purchase. You can visit your Private Page and learn some more information about INCOTERMS.
Please Note! Neither of these terms include the import custom clearance, payment of import custom duties and taxes at the buyer's country.