CIF stands for Cost, Insurance, and Freight. It’s an Incoterm, a standardized term developed by the International Chamber of Commerce (ICC) to bring clarity and consistency to international commercial transactions. Under CIF, the seller takes on a significant portion of the legwork, ensuring the goods reach the buyer’s designated port safely.
How Does CIF Work?
- The seller covers the cost of transporting the goods from their origin to the buyer’s designated port. This includes arranging and paying for ocean freight, terminal handling charges, and any necessary export documentation.
- The seller is also responsible for obtaining minimum insurance coverage for the goods during their journey. This minimum insurance typically covers loss or damage caused by maritime perils, such as fire, storms, or collisions.
- The seller takes care of loading the goods onto the vessel at the origin port and ensures their proper unloading at the destination port (though the buyer might be responsible for any unloading costs).