Shipping Terms Glossary

Shipping Terms Glossary
Cost Insurance Freight Incoterm (CIF)

Cost Insurance Freight Incoterm (CIF)

CIF terms are only applicable to ocean freight shipments.

What is Cost Insurance Freight (CIF)?

CIF is one of the 11 International Commercial Terms (Incoterms) used in trade, where the seller is required to:

1. Arrange and pay for the insurance of goods in transit at 110% of the declared value.

2. Arrange and pay for transportation costs from the factory to the final port of import.

🚨 CIF terms are only applicable to ocean freight shipments.

Bookairfreight - what is CIF?

🚨 Point of Risk Transfer!

When the goods are loaded onto the main ship in the port of export.

When should you choose CIF?

CIF is most commonly used for bulk cargo, oil, and oversized or overweight shipments .

Simple Scenario Time:

Business Owner (Buyer): Angela is sourcing grains from China to her warehouse in Los Angeles, US.

Supplier (Seller): A sourcing agent located in China.

Agreed Term: CIF Port of Los Angeles.

Seller’s duties: Seller’s duties: In charge of export clearance, paying for transportation and insurance until the Port of Los Angeles.

Buyer’s duties: In charge of all import clearance, arranging and paying for transportation from the Port of Los Angeles to the warehouse (including loading and unloading charges).

Point of Risk Transfer: When the goods are loaded on to the ship in China, the risks of goods are transferred to the buyer.

Cost allocation. Who pays for what under CIF?

Cost allocation - who should pay what under CIF:

What is the difference between CIF and CFR ?

The only difference is insurance!

Under CIF , the seller is legally obligated to buy insurance for the goods at 110% of their value.

Under CFR , there is no legal obligation to buy insurance but the buyer is welcome to do so if he wants .


Daisy Jiang

Proud Co-Founder and CEO of Bookairfreight. Shortly after starting to work in the world of logistics, I was astonished at how difficult and time consuming it was for businesses to get their hands on a simple air freight quote. I saw this as an opportunity to really make a difference in people’s lives, and felt like I had to do something. It was the spark that lit the fire of Bookairfreight’s creation.

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