What are the differences? Both FOB or CIF are frequently used terms for international business. Under both CIF and FOB terms, the buyer is responsible for the final delivery and any charges related to the customs clearance or exam charges. The reason is very obvious. FOB and CIF both describe overseas shipping agreements that specify whether the buyer or the seller is responsible for the goods while they are in transit¹. They are so popular that, their usage most probably surpass remaining 9 Incoterms' usage. There are lots of acronyms, all 3 lettered, and having a predefined meaning that is easily understood by both buyers and sellers in international trade. Get a better idea of which term is right for your business in this Incoterms® comparison of CIF versus FOB. FOB or CIF: Things to note The FOB also allows the buyer to obtain better insurance prices, since you’ll be looking for a deal covering a larger part of the logistical transportation. It depends on the importers and exporters terms and condition and knowledge of the local market from where the product are exported. When you need to import goods, we give you five reasons to choose Ex Works or FOB over the other shipping terms. For a shipment around 45 kilos you are probably best off using a parcel service like UPS, FedEx, DHL, etc if you do move it via FOB … Published on April 25, 2016 April 25, 2016 • 474 Likes • 75 Comments. If you want to know the valuation method for a particular destination, you can always find out from our Countries page. And, most importantly, which of these shipping methods is the most cost-effective? As mentioned earlier, customs departments will use either FOB and CIF as a valuation method to determine the taxable value of foreign imports. When you sell CIF you can make a slightly higher profit and when you buy FOB you can save on costs. FOB vs CIF FOB and CIF are International Commercial terms, or Incoterms, as they are popularly known. FOB and CIF are the two most popular price terms of the Inco terms. Which is better FOB or CIF? A newbie shipping goods for the first time might come across terms such as EXW and FOB. FOB that stands for Free on Board is a very popular mode of contract between buyers and sellers. These are all great questions. The most frequently used two Incoterms, FOB and CIF, are restricted to be used in sea shipment only. Here are a few points to keep in mind when … FCA stands for Free Carrier, and in this contract the seller is responsible for the goods only up to the time that he loads the goods to the cargo (often at his own premise), but the carrier is chosen by the buyer. The main provision of FOB pertains to seller taking the responsibility of loading the goods on to the vessel that has been chosen by the buyer. FOB – Al igual que el valor CIF, es una cláusula de compraventa, pero se diferencia en cuanto a que el valor del transporte y seguro es cubierto por el comprador, es decir por el país de procedencia. In this post, I will try to explain the importing process from China as simply as possible and to best of my knowledge.