The f.o.b. price (
free on board price
) of exports and imports of goods is the market value of the goods at the point of uniform valuation, (the customs frontier of the economy from which they are exported).
What is FOB and CIF in export?
Meaning:
FOB means free on board
. The price includes all the expenses incurred until goods are actually loaded on board the ship at port of shipment. CIF stands for cost, insurance and freight. … CIF price includes free on board and charges of Freight and marine insurance.
What is the meaning of FOB in shipping terms?
What Is
Free on Board
(FOB)? Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB shipping point” or “FOB origin” means the buyer is at risk and takes ownership of goods once the seller ships the product.
Which is better CIF or FOB?
It is advised to go with the
FOB option
for shipping as the buyer gets control over the shipping process and the costs are comparatively cheaper. Whereas in CIF shipping, since the seller has the authority over shipping charges and arranging a ship with the help of a freight forwarder, the cost is higher.
What is the meaning of CIF in export?
Cost, insurance, and freight
(CIF) is an international shipping agreement, which represents the charges paid by a seller to cover the costs, insurance, and freight of a buyer’s order while the cargo is in transit. … The goods are exported to the buyer’s port named in the sales contract.
Who pays shipping in FOB?
For FOB destination,
the seller assumes
all costs and fees until the goods reach their destination. Upon entry into the port, all fees—including customs, taxes, and other fees—are borne by the buyer.
How is CIF calculated?
In order to find CIF value, the freight and insurance cost are to be added. … Insurance is calculated as
1.125% – USD 13.00 (rounded off)
. The total amount of CIF value works out to USD 1313.00. If any local agency commission involved, the same also is added on CIF value of goods – say 2% on FOB – USD 20.00.
What is FOB CIF and CNF?
Several parties are involved in international shipment. … These are
freight on board (FOB) and cost net freight (CNF)
. Other terms such as cost net insured (CIF) and cash against document/delivery (CAD) are also used. Based on the relationship between business entities, the terms are set.
How is FOB value calculated?
FOB Value = Ex-Factory Price + Other Costs
(b)
Other Costs in the calculation of the FOB value shall refer to the costs incurred in placing the goods in the ship for export, including but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, et cetera.
What is the advantage to using CIF costing terms?
Advantages and Disadvantages of CIF – Cost insurance and Freight. The advantage to the seller is that
it can often obtain cheap insurance and then build a larger amount into its selling price
. The advantage to the buyer is that it does not have to worry about declaring the shipment to its own insurer.
What is CNF in shipping?
If you see the three letters CNF together, with regards to shipping, the acronym stands for “
Cost Net Freight
.” It’s a shipping agreement where the seller pays for delivering the item to the port closest to the buyer, but it doesn’t include the cost of insurance.
What is the CIF value?
CIF (Cost, Insurance, Freight) A pricing term indicating that the
cost of goods, insurance, and freight are included in the quoted price
. Duty is calculated by adding all costs together.
What is CIF full form?
A
customer information file
(CIF) is a system that consolidates customer account information and combines it with basic demographic information to create a current snapshot of a customer relationship.
When should I use CIF?
The terms are also used for inland and air shipments. CIF is considered a
better way to buy goods for those who are new to international trade
. It might also be a better option for new traders who have small cargos.
What is the difference between CFR and CIF?
Cost and freight (CFR) is a trade term that requires the seller to transport goods by sea to a required port. Cost, insurance, and freight (CIF) is what a
seller pays to cover the cost of shipping
, as well as the insurance to protect against the potential damage of loss to a buyer’s order.
