Incoterms CIF: Cost, Insurance and Freight

Named Place Requirement: Port of Destination

Applies to:       Sea and inland waterway  Sea and inland waterway only

Cost Insurance and Freight Incoterms CIF
(Click to enlarge)

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.

lightbulb   The seller is obligated to secure insurance for the buyer, but only for minimum coverage.

 

CIF Incoterm Obligations

Seller’s Obligations

  • Goods, commercial invoice and documentation
  • Export packaging and marking
  • Export licenses and customs formalities
  • Pre-carriage and delivery
  • Loading charges
  • Delivery at named port of destination
  • Proof of delivery
  • Cost of pre-shipment inspection
  • Minimum insurance coverage

Buyer’s Obligations

  • Payment for goods as specified in sales contract
  • Discharge and onward carriage
  • Import formalities and duties
  • Cost of import clearance pre-shipment inspection

Get expert cost, insurance and freight guidance

AIT’s global team of experienced transportation management is well-versed in the Incoterms rules and all shipping terms. Have a question about CIF Incoterms? Contact a representative today.

AIT has a robust global logistics network, with more than 60 offices worldwide.

See our Global Network