The CIFCost, Insurance, and Freight is one of the most common trade terms in international trade and is part of the International Chamber of Commerce’s (ICC) Incoterms. Understanding and correct application of CIF terms can not only guarantee the fairness of transactions but also effectively prevent misunderstandings and disputes that may arise in the process of trade. This article will take you to know every detail of CIF terms, from cost to insurance, from shipping fees to additional considerations. When the parties agree to CIF terms in the contract, the costs and risks the seller will bear include:

The Cost (Cost)
Cost of the goods:It is the purchase cost of the goods themselves, i.e. the basic price of the goods sold by the buyer in the direction of the sale.
Cost of packaging:Suitable for export packaging costs, ensuring the safety of the goods in the process of transportation and compliance with the regulations of the importing country.

The Insurance Prices (Insurance)
Insurance of goods:The seller must be insured for the transportation of goods from the place of departure to the port of destination with the minimum range of insurance. Insurance usually covers all basic risks, including the risk of loss or damage of goods during transportation. Under CIF conditions, the insurance must cover at least 110% of the invoice value and usually includes safety insurance or water insurance.

Fees of Freight (Freight)
Cost of transportation:Includes all related charges for transporting goods from the seller’s warehouse or factory to the buyer’s designated destination port. Usually this includes charges for land shipping to the departure port, cargo charges and shipping charges.
Purpose port costs:Under the CIF conditions, although the seller is responsible for paying the cost of shipping to the destination port, the buyer must pay for the unloading and subsequent costs after the goods arrive at the destination port, including clearance duties, import taxes, unloading fees, storage fees, etc.

Additional considerations :
(1) Export clearance costsCIF prices typically do not include export clearance fees, but the actual operation requires the seller to handle export clearance fees, including related taxes and handling fees.
2) Cost of destination:These costs are borne by the buyer and start from the moment the goods arrive at the destination port.

The CIF clause is an important agreement in international trade, which clarifies the distribution of costs, risks and responsibilities between the buyers and sellers. Through the analysis of this article, it will be possible to more accurately grasp the essence of the CIF clause and escort the international trade path. In practice, a detailed understanding of the allocation of each cost and responsibility is essential for both sides.