What is the difference between FOB CIF and CFR?

Definition and difference between the three:

1. FOB (Free on Board), also known as "free on board", is one of the terms commonly used in international markets. In the case of FOB transactions, the buyer is responsible for dispatching the ship to receive the goods, and the seller shall load the goods on the vessel designated by the buyer within the port of shipment and the specified time limit specified in the contract, and notify the buyer in a timely manner. When the goods are loaded onto the named vessel at the port of shipment, the risk passes from the seller to the buyer.

2. The Chinese translation of CIF terms is cost plus insurance plus freight, (designated port of destination, its original text is cost, insurance and freight(insert named port of destination) according to this term, the constituent factors of the price include the usual freight and the agreed insurance premium from the port of shipment to the agreed destination port, so the seller has the same obligations as the CFR term, but also for the buyer to handle freight insurance, To pay the insurance premium, according to the general international practice, the seller should add 10% of the insurance amount according to the CIF price.

If the buyer and the seller do not agree on a specific insurance, the seller only needs to obtain the minimum insurance coverage, if the buyer requests additional war insurance, the seller shall be insured on the premise that the insurance premium is borne by the buyer, and when the seller can do so, it must be insured in the contract currency.

3. CFR is the abbreviation of Cost and Freight, which means cost plus freight in Chinese, which means that the goods are delivered on board the ship at the port of shipment, and the seller needs to pay the cost of transporting the goods to the designated destination port. But the risk of the goods is transferred at the time of delivery on board the ship at the port of shipment.

FOB delivered on board.

Free on board (......"Named port of shipment)" means that the seller completes delivery of the goods when they cross the ship's side at the named port of shipment. This means that the buyer must bear all risks of loss of or damage to the goods from that point onwards. FOB terminology requires the seller to clear the goods for export.

CIF cost, insurance plus freight.

"Cost, Insurance and Freight" means that the seller completes delivery of the goods at the port of shipment when they cross the ship's side.

CFR cost and freight.

Cost & Freight (......Designated port of destination)" means that the goods are delivered at the port of shipment when they cross the ship's side of the ship, and the seller must pay the freight and costs required to transport the goods to the designated port of destination. However, the risk of loss of or damage to the goods after delivery, as well as any additional costs due to various events, is transferred from the seller to the buyer.

How does the FOB cost?

It depends on what the customer goes, if the customer asks to go FOB, you will quote all the prices in China, including costs, terminal operation fees, document fees, ** fees, etc.

These are the 3 (more commonly used) terms of ITG

The main difference is in the shipping costs.

FOB price = purchase cost price + domestic expenses + net profit.

CFR price = purchase cost price + domestic cost + foreign freight + net profit.

CIF price = purchase cost price + domestic expenses + foreign freight + foreign insurance premium + net profit.

The main difference is whether shipping is included, whether it includes shipping insurance, and the details are as follows.

FOB, CIF, CFR are three international terms that describe the responsibilities and costs of buyers and sellers in a transaction.

FOB (Free On Board): The seller is responsible for transporting the goods to the port of shipment, but the buyer is responsible for the cost of loading the goods on the ship and all subsequent costs.

CIF (Cost, Insurance, and Freight): The seller is responsible for the cost, insurance, and freight of the goods to the port of destination.

CFR (Cost and Freight): The seller is responsible for the cost and freight of the goods to the port of destination, but the buyer is responsible for the spring insurance of the goods.

The FOB buyer is responsible for the sea freight and insurance, the CIF seller is responsible for the sea freight and insurance, the CFR buyer is responsible for the insurance fee, the seller is responsible for the sea freight, and the risk division is also on the side of the ship at the port of shipment.

Before and after, the same applies only to sea and river transport.

FOB, CFR, and CIF.

The similarities: 1. The applicable mode of transportation is the same: water transportation 2. The boundary of risk division is the same: the port of shipment.

That is, in terms of the risk assumed by the seller or buyer: FOB CFR = CIF

3. The place of delivery is the same: on board the port of shipment.

4. The person responsible for the import and export procedures is the same: the export procedures are handled by the seller, and the import procedures are handled by the buyer.

The difference between the three ** terms FOB, CFR and CIF:

The responsibilities borne by the buyer and seller (transportation, insurance, import and export procedures, etc.) and the costs borne by the buyer and seller (the costs related to the above liabilities) are different. i.e., the FOB buyer is responsible for the sea freight and insurance, the CIF seller is responsible for the sea freight and insurance, the CFR buyer is responsible for the insurance premium, and the seller is responsible for the sea freight.

In terms of liability and expenses incurred by the seller: CIF>CFR>FOB

FOB cost price.

CFR = FOB + Shipping Fee.

CIF = CFR + insurance premium.

1. Similarities between FOB, CFR, CIF:

1. The applicable mode of transportation is the same: water transportation.

2. The seller or buyer bears the risk: FOB CFR=CIF.

3. The place of delivery is the same: on board the port of shipment.

2. Differences between FOB, CFR, CIF:

1. The FOB buyer is responsible for the sea freight and insurance premium, the CIF seller is responsible for the sea freight and insurance premium, the CFR buyer is responsible for the insurance premium, and the seller is responsible for the sea freight.

2. In terms of the responsibilities and expenses borne by the seller: CIF>CFR>FOB.

3. In terms of the responsibilities and expenses borne by the seller: FOB>CFR>CIF.

The differences between FOB, CIF, CFR are:

1. The included costs are different: FOB** includes cost + freight, CIF** includes cost + freight + insurance, CFR** includes cost + freight;

2. The applicable transportation methods are different: FOB and CIF can only be by sea, CFR can be any mode of transportation;

3. The risk transfer object is different: the buyer bears all the risks after FOB and CIF cross the ship's side, and the CFR risk transfer is the delivery to the carrier.

Extended Material: The Role of Terminology.

1. It is conducive to the negotiation of transactions and the conclusion of contracts between buyers and sellers. Since each of the first terms has a unified interpretation of the obligations of the buyer and the seller, it is conducive to the buyer and the seller to clarify their respective rights and obligations and close the transaction as soon as possible.

2. It is conducive to the calculation of the first and the best costs for both buyers and sellers. Various terms have a clear definition of who bears the costs, freight and insurance premiums, and it is easier for buyers and sellers to calculate the costs and costs.

3. It is conducive to resolving disputes in the performance of the contract. Since the first term is interpreted by the relevant international practice, the dispute between the buyer and the seller in the transaction can be interpreted through the international practice.

Delivered on board is divided into free on board at the port of shipment and free on board at the port of destination, and "free on board at the port of shipment" means that the seller completes the delivery when the goods cross the side of the ship at the designated port of shipment.

Obligations of the seller: 1. Deliver the goods to the ship assigned by the buyer in the customary manner at the port of shipment within the time or time limit specified in the contract, and notify the buyer in a timely manner.

2. At your own risk and expense, obtain an export license or other official approval certificates. When customs formalities are required, all customs formalities required for the export of goods are carried out.

3. Bear all the costs and risks of the goods before they cross the ship's side at the port of shipment.

4. Provide the usual documents to prove that the goods have been delivered to the ship. If the buyer and seller agree to use electronic communications, all documents may be replaced by electronic data interchange (EDI) information with equal effect.

Buyer's obligations: 1. Obtain an import license or other official approval documents at your own risk and expense. When customs formalities are required, all customs formalities for the import of goods and transit through other countries are carried out, and the relevant fees and transit fees are paid.

2. Responsible for chartering or booking, paying freight, and giving the seller sufficient notice of the ship's name, loading place and required delivery time.

3. Bear all the costs and risks of the goods after the shipment of the goods in the port of Songsui after crossing the ship's side.

4. Accept the relevant documents provided by the seller, receive the goods, and pay the price according to the contract.

1. FOB, CFR, CIF have the same point of laughter:

1. The applicable mode of transportation is the same: water transportation.

2. The seller or buyer bears the risk: FOB CFR=CIF.

3. The place of delivery is the same: on board the port of shipment.

2. Differences between FOB, CFR, CIF:

1. The FOB buyer is responsible for the sea freight and insurance premium, the CIF seller is responsible for the shipping and insurance premium in Haihe Prefecture, the CFR buyer is responsible for the insurance fee, and the seller is responsible for the sea freight.

2. In terms of the responsibilities and expenses borne by the seller: CIF>CFR>FOB.

3. In terms of the responsibilities and expenses borne by the seller: FOB>CFR>CIF.

FOB (Free On Board) is loading on board, which is commonly called loading on board at the port of shipment.

CFR (Cost and Freight) stands for Cost and Freight.

CIF (Cost Insurance and Freight) stands for cost plus insurance and freight.

The differences between FOB, CFR, and CIF are as follows:

1. The nature of the port pointed to is different.

The port to which the FOB refers is the seaport or river port of the seller's country or region, while the CFR and CIF are the seaport or river port of the buyer's country or region.

2. The cost structure is different.

fob**= purchase cost price + domestic expenses + net profit;

CFR** = purchase cost price + domestic cost + foreign freight + net profit;

CIF**= purchase cost price + domestic expenses + foreign freight + foreign insurance premium + net profit.

3. The payment and handling of insurance premiums are different.

The buyer shall be responsible for the insurance premiums of FOB and CFR, and the seller shall notify the buyer before the goods are loaded on the ship;

The CIF insurance premium is handled and paid by the seller, who takes care of the insurance and hands over the insurance policy to the buyer as stipulated in the contract.

4. Chartering and ordering ships are different.

FOB is the responsibility of the buyer to conclude the contract of carriage and arrange the means of transport, and the seller is required to deliver the goods to the ship designated by the buyer on a specified date or period. CFR is the seller's responsibility for concluding the contract of carriage, arranging the shipment and bearing the freight, and CIF's is the seller's responsibility for concluding the contract of carriage, arranging the shipment and bearing the freight, and also needs to apply for the cargo water transportation insurance at its own expense.

The common denominators mainly include the following:

1. FOB, CFR cavity vertical and CIF are all suitable for water transportation, and are suitable for inland river transportation and sea transportation.

2. The boundaries of risk transfer are the same, all of which are based on the fact that the goods cross the side of the ship at the port of shipment, and the seller bears all the risks and expenses before the goods cross the ship's side at the designated port of shipment, and the buyer bears all the risks and expenses arising from the time the goods cross the side of the ship at the designated port of shipment.

1. FOB Seller's Responsibilities:

Provide the goods in accordance with the provisions of the contract, go through the formalities for export customs clearance, load the goods on the ship designated by the buyer according to the usual methods of the port within the agreed shipping period and the port of shipment, and send notice to the buyer that the goods have been loaded on the ship, and bear all the risks until the goods cross the side of the ship at the port of shipment.

2. FOB Buyer's Responsibility:

Charter, book the vessel and inform the seller of the name of the vessel and the date of arrival and loading. Bear all risks after the cargo crosses the ship's side at the port of shipment. Handle import license and import customs clearance procedures.

3. CFR Seller's Responsibilities:

Responsible for chartering and booking and paying freight, loading the ship at the port of shipment within the agreed time limit, and sending a notice of loading to the buyer in a timely manner. Bear all the costs and risks before the goods cross the ship's side at the port of shipment, and go through the export customs clearance procedures.

4. CFR Buyer's Responsibilities:

Bear all costs and risks after the goods have crossed the ship's side at the port of shipment. to accept the goods delivered by the carrier at the designated port of destination.

5. CIF Seller Responsibilities:

Responsible for chartering and booking, loading the goods on board the ship within the specified port of shipment and time limit, and paying the freight for the goods to the port of destination, and notifying the buyer after the goods are loaded. Bear all the costs and risks of the goods before they cross the ship's side at the port of shipment, handle freight insurance, and handle export customs clearance procedures.

6. CIF Buyer's Responsibility:

Bear the risks and expenses of the goods after they cross the ship's side at the port of shipment, go through the import customs clearance procedures, accept the documents or electronic messages provided by the seller, and pay the price according to the contract.