Incoterm CIF explained

Incoterm CIF meaning
Incoterm CIF means "Cost Insurance and Freight.If you want to transport goods by water (applies to both sea and inland waterways) you can use Incoterm CIF. This Incoterm is only used in water transport and not in other forms of transport. The goods are transported to the agreed destination port by a carrier arranged by the seller.

CIF transport
Transport with Incoterm CIF is therefore exclusively by water. The seller is responsible for the transport, costs and risk until the goods are delivered on board the ship at the pre-arranged port of destination. So, as the seller, you also take care of the pre-transportation to the port of shipment. Here you load the goods onto the ship that will transport them to the destination port. The buyer then unloads the goods when they arrive at the port.

Incoterm CIF costs
Most of the costs with Incoterm CIF are for the seller. The cost of transportation up to the port of destination is paid by the selling party. The costs for the rest of the transportation of the goods are for the buyer. Consider the transportation from the port to the final inland destination. All costs incurred in importing the goods must also be paid by the buyer.

Obligations of seller with CIF
With CIF, the risk of loss or damage to the goods lies with the seller until the goods are delivered aboard the ship at the pre-arranged port. This is the place of delivery. The seller also pays the transportation costs for transportation to the agreed port of destination. This requires a contract of carriage. The unloading and loading of the goods is also paid for by the seller. The seller is also obliged to take out transport insurance for the buyer. Here at least an insurance with minimum coverage must be taken out. You as the seller are also obliged to arrange export declarations with customs and you make sure that all export documents are in order.

Buyer's obligations with CIF
The buyer is responsible for all aspects surrounding the import of the goods. This includes import taxes, customs fees and any further transportation costs if the goods need to be transported into the country, for example. Unloading the goods at the final destination is also the responsibility of the buyer. All costs and resources required for this must be arranged by you as the buyer. The buyer must also arrange and apply for local import permits.

Incoterm CIF vs. CFR
This Incoterm is very similar in content to the Incoterm CFR. Both are only suitable for transporting goods by water and the selling party is responsible for the transportation. Unlike CFR, CIF requires the seller to provide insurance for the goods. The selling party takes out insurance for the buyer that covers any damage or loss of the goods from the port of shipment to at least the port of destination. With Incoterm CFR, the seller is not required to purchase this insurance.

Sea freight or air freight shipments with customs obligation?
Global shipments and shipments within Europe to/from non-EU countries are subject to customs obligations. What measures do you need to take and what documents are required? With the knowledge and experience of our specialists in the Rotra customs department, we are able to provide solutions for all your customs obligations that fit your logistics process while you focus on your own core business. For more info contact us directly.