FOB and CIF differ in who arranges the shipping and who buys the insurance. The right choice gives you control over cost and saves you work.
FOB and CIF are the two most common delivery terms for goods shipped by sea.
Under FOB, the seller loads the goods on board the vessel at the port of shipment. From there, freight and insurance are the buyer’s to arrange. This suits buyers who already have a freight forwarder and good rates.
Under CIF, the seller arranges and pays for the sea freight and insures the shipment to the buyer’s port. The buyer has less to organise and knows in advance what the goods will cost delivered to the port. Note that insurance under CIF is minimum cover unless the parties agree otherwise.
One point is often misunderstood: under both terms, risk passes to the buyer once the goods are on board at the port of shipment. With CIF the seller pays for freight and insurance, but if the goods are damaged in transit it is the buyer who deals with the insurer.
CFR is the same as CIF without the insurance.
If you are importing from Vietnam for the first time, CIF is usually simpler. Once shipments become regular, many buyers move to FOB to manage freight themselves.
---
