What is FOB and CIF and what are they off?

What is FOB and CIF and what are they off?

  1. for example you want to sell a product overseas by sea, FOB is a delivery with loading into the transport of the buyer, CIF is a delivery with all the overloads, for example, by sea to the port of the buyerFOB (Free port ... ))
    Free On Board (... named port of shipment)

    The term "Free On Board" means that the seller delivers when the goods cross the ship's rail at the named port of shipment. This means that from now on all costs and risks of loss or damage to the goods must be borne by the buyer. Under the terms of the term FOB, the seller is responsible for customs clearance of the goods for export. This term can only be used for the transport of goods by sea or inland waterway. If the parties are not going to deliver the goods through the ship's rail, the term FCA should be used.
    CIF (Cost, Insurance and Freight (... named port of destination).)
    Cost, Insurance and Freight (... named port of destination)

    The term Cost, Insurance and Freight means that the seller delivers when the goods cross the ship's rail in the port of shipment. The seller must pay the costs and freight necessary to deliver the goods to the named port of destination, BUT the risk of loss or damage to the goods, like any additional costs arising after the shipment of the goods, is transferred from the seller to the buyer.

    However, in CIF the seller also has to procure marine insurance against the buyer's risk of loss or damage to the goods during transport.

    Consequently, the seller must conclude an insurance contract and pay insurance premiums. The buyer must take into account that, under the terms of the CIF term, the seller is required to provide insurance only with minimal coverage (See Introduction paragraph 9.3).

    If the buyer wish to have the protection of greater cover, he would either need to agree with the seller or to make his own extra insurance.

    The CIF term requires the seller to clear the goods for export.
    This term can be used only for sea or inland waterway. If the parties do not intend to deliver the goods across the ship's rail, the CIP term should be used.

  2. These are the types of supplies. Another 1 is for example DAP.

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