Why choose FOB vs. CIF

Why choose FOB vs. CIF

FOB vs. CIF. Carrying commodity by sea is the smartest option for traders who want to ship their products safely, fast and in addition, save money in the process. However, for the happy conclusion of this transaction were created the Incoterms by the International Chamber of Commerce (ICC), which dictate the rules at the time of the purchase and sale operation.


FOB (Free On Board), refers to an Incoterm that determines that the seller is responsible for covering the transportation, loading of the merchandise and preparing the articles for export. If the commodity are damaged in one of the stages mentioned above, its the seller who responds. After loaded on the ship, the buyer takes over.

CIF (Cost, Insurance and Freight) is another Incoterm, which specifies that is the seller who is responsible for covering the transport, loading of the merchandise, preparing the articles for export on the ship until they reach the port of destination.

But in the case of the CIF, is the seller who is responsible for covering the insurance and freight of the port of destination, although it may seem advantageous, in fact it is not. Because the buyer is in the hands of the company that the seller wants to hire, he has no control over the merchandise he purchased and absorbs the greater risk in case of any inconvenience.

Opting for the FOB means obtaining the benefits of choosing an insurance company of your absolute confidence with which you can work with all peace of mind, choose routes and transit time, thus controlling the travel time of this.

FOB offers greater benefits to the buyer, while the latter can handle a budget directly and with the peace of mind that your merchandise will be very safe.

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