What does Cost Insurance and Freight(CIF) mean? ID&T Importers / Exporters guide.

Cost Insurance and Freight(CIF)

CIF - named port of destination.

Cost, Insurance and freight means that the seller delivers when the goods pass the ships rail in the port of shipment.

The seller must pay the costs and freight necessary to bring the goods to the named port of destination. BUT the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time of delivery are transferred from the seller to the buyer. However, in CIF the seller also has to procure marine insurance against the buyer’s risks of loss of or damage to the goods during carriage. (Official INCOTERMS).

Selling goods on CIF enables the seller to remain in control of goods up to when they arrive to named destination.

The buyer is responsible for all the costs on arrival including the unloading costs.

Buying CIF removes any need to be involved in the shipping process. Goods though may not arrive when you require them and you will not have control over shipping costs.

Importing

Establish a relationship with new supplier.
Confirm terms of trade. Most popular are FOB or CIF.
Agree payment terms ie deposit balance on receipt of goods/documents
Approve samples.
Place an order with new supplier in writing. Confirming the exact order, trade terms and advise all documents you need.
Appoint your freight forwarder / custom broker.

Exporting

Establish a relationship with new buyer.
Confirm terms of trade. Most popular are FOB or CIF.
Agree payment terms for deposit; balance on receipt of goods/documents.
Have samples approved.
Receive an order with new buyer in writing. Confirming the exact order, trade terms and agree all documents you will provide.
Appoint your freight forwarder.