Cif vs. Fob — What's the Difference?

Common in maritime shipping contracts.

Buyer assumes risk once goods are on board the ship at the origin port.

Seller pays for goods, insurance, and freight to the destination port.

Buyer arranges and pays for shipping from the origin port.

Seller assumes all risks until the destination port.

Excludes insurance, which the buyer must obtain.

Suitable for buyers seeking a turnkey solution.

Often results in cost savings for experienced buyers.

Includes insurance coverage by the seller.

Popular in international trade for greater buyer control.

Cif is a French brand of household cleaning products owned by the Anglo-Dutch company Unilever, known as Jif in Australia, New Zealand, Japan, Middle East and the Nordic countries.Cif was launched in France in 1965 and was marketed in competition against scouring powders (such as Vim scouring powder) as a creamy and hence protective, but powerful domestic cleaner.

A small pocket at the front waistline of a pair of trousers or in the front of a vest, used especially to hold a watch.

A short chain or ribbon attached to a pocket watch and worn hanging in front of the vest or waist.

An ornament or seal attached to such a chain or ribbon.

A key fob.

To cheat or deceive (another).

A little pocket near the waistline of a pair of trousers or in a waistcoat or vest to hold money or valuables, especially a pocketwatch.

A short chain or ribbon to connect such a pocket to the watch.

(see usage notes) A small ornament attached to such a chain.

A hand-held remote control device used to lock/unlock motor cars etc.

To cheat, to deceive, to trick, to take in, to impose upon someone.

To beat; to maul.

(incoterm) FOB

A little pocket for a watch; - callled also a watch pocket.

A short chain or ribbon attached to a pocket watch, usually worn hanging out of the watch pocket, and used to conveniently remove the watch from the watch pocket.

To beat; to maul.

To cheat; to trick; to impose on.

A vest pocket to hold a pocket watch

An adornment that hangs from a watch chain

Short chain or ribbon attaching a pocket watch to a man's vest

Deceive somebody;

CIF is generally safer for the buyer as it includes insurance and all transport costs are covered by the seller.

No, under CIF terms, the seller selects the shipper and the shipping route.

In FOB terms, the buyer is responsible for handling customs clearance and all related documentation.

FOB means Free on Board, where the buyer takes responsibility once goods are loaded onto the shipping vessel.

In CIF, the seller is responsible for all charges up to the destination port, but import duties are typically the buyer's responsibility.

CIF stands for Cost, Insurance, and Freight, indicating that the seller pays for these up to the destination port.

Sellers may prefer FOB to reduce liability and complexity by handing over responsibility at the origin port.

Insurance costs are included in CIF, potentially raising the overall cost, whereas in FOB, the buyer needs to procure their own insurance.

FOB can be more cost-effective and gives the buyer control over the shipping process and costs.

The choice depends on the buyer’s familiarity with shipping; CIF can be simpler for less experienced buyers, while FOB might benefit seasoned traders.

CIF is primarily used for sea freight; air freight typically uses different Incoterms.

Buyers can mitigate risks by securing comprehensive insurance and carefully selecting reliable shipping partners.

Clarity about the exact coverage of insurance and responsibilities for shipment until the destination port is essential.

FOB might lead to faster delivery as the buyer has control and can expedite shipping processes.

A common mistake is misunderstanding the extent of insurance coverage and responsibilities until the destination port.