The difference between FOB and CIF terms
The difference between FOB and CIF terms
1. Port after the price term nature, FOB port refers to the seller after the harbour or river port of the host countries, and after the CIF port refers to the buyer the harbour or river port of the host countries and CIF price terms should indicate the port of destination after their country, such as Victoria harbour in Hong Kong, the UK, Brazil, must refill country to distinguish.
2. The cost composition is different, and the quotation is different. FOB prices take into account goods purchased from raw materials. Production until export declaration goods are shipped to buyer's designated ship's hold with all costs and profits, while CIF is based on FOB price plus Shanghai freight and insurance.
3. The payment objects of THC terminal operation fee are different. According to the principle of who pays the sea freight and who pays the THC cost, the THC cost in FOB terms shall be borne by the buyer, while the THC cost in CIF shall be borne by the seller. The current domestic THC standard is 370 YUAN for 20 'container and 560 Yuan for 40' large container. The THC cost shall be clearly indicated in the trade contract by whom.
4. Insurance payment. FOB. CNF insurance shall be handled by the buyer and the Seller shall notify the Buyer before shipment. CIF insurance is effected by the seller who pays the premium and delivers the policy to the buyer according to the terms and conditions of the contract.
5. The international practice is different in terms of price. The FOB price is based on the American practice and the general rules of 1990 and 2000 of the International Chamber of Commerce, while CIF is based on the general rules of 1990/2000 of the International Chamber of Commerce.
6. Air freight: FOB The seller shall only bear all charges of air freight before loading the goods on the aircraft, and the charges of air freight to destination shall be borne by the Buyer.
In addition to the FOB air freight, the seller shall also bear the air freight and air insurance for the goods as required by the buyer.
Title to the air cargo passes to the buyer upon delivery of the cargo at the port of shipment.
7. Different from chartering and booking: THE FOB price shall be arranged by the buyer's designated shipping company/shipping agency or even the freight agency. Whether the buyer can book shipping space on time will affect the seller's timely delivery and presentation of documents by bank, etc.
The CIF price is subject to the seller's choice of shipping company or freight forwarder.
8. The shipping advice shall inform the buyer at different times: FOB price and CNF shall inform the buyer of the contents of shipment before shipment. Details of shipment so that the buyer has sufficient time to arrange for Marine insurance on the goods whereas CIF is to be insured by the seller.
9. After shipment tracking services: FOB price terms because it is the customer designated agent/forwarder, the other three cheng cheng transit general shall be the responsibility of the buyer, and CIF price terms, to provide better service to the seller usually contact forwarder agent will transfer in time by the seller, the port of destination agent information, when to port data to inform the buyer. (But the seller does not have this obligation in CIF price, and the buyer usually has this requirement in actual operation)
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