FOB stands for “Free On Board.” It’s a shipping term indicating that the seller is responsible for the goods until they are loaded onto the vessel at the specified port. Once the goods are on board, the responsibility shifts to the buyer.
FOB is often followed by the name of a port, indicating the point at which the seller’s responsibility ends and the buyer’s begins in terms of transportation costs and risk.
What is CIF in Shipping and Trading?
Understanding Cost, Insurance, and Freight CIF, short for Cost, Insurance, and Freight, is a crucial term in international shipping and trading contracts. It outlines the responsibilities and costs involved in transporting goods from the seller to the buyer, particularly across international borders.
Cost (C) The “Cost” in CIF refers to the price of the goods themselves. It encompasses the value of the products being sold, including any associated expenses incurred by the seller up to the point of shipment.
Insurance (I) The “Insurance” aspect of CIF highlights the seller’s obligation to arrange and pay for insurance coverage for the goods during their journey from the seller’s location to the agreed-upon destination port. This insurance provides protection against risks such as damage, loss, or theft while the goods are in transit.
Freight (F) “F” in CIF stands for Freight, denoting the transportation costs incurred in delivering the goods to the destination port specified by the buyer. The seller is responsible for arranging and paying for the freight services, which include the actual transportation of the goods via ship or other modes of transportation.
How CIF Works
When a CIF agreement is in place, the seller handles all aspects of shipping until the goods reach the designated port of destination. This includes loading the goods onto the vessel, obtaining insurance coverage, and arranging for transportation.
Benefits of CIF For buyers, CIF offers the advantage of a straightforward procurement process, as the seller assumes responsibility for the logistics and insurance.
This can streamline international transactions and provide buyers with peace of mind knowing that their goods are protected during transit. Considerations While CIF can be convenient, it’s essential for both buyers and sellers to carefully review the terms of the agreement. Sellers should factor in the costs of insurance and freight when determining the overall price of the goods, while buyers should be aware of their responsibilities upon the goods’ arrival at the destination port.
Hermes Petro Refinery, established in the 2000s, has achieved steady growth through its highly experienced workforce, global collaborations, and cutting-edge technology. This state-of-the-art facility exemplifies efficiency, sustainability, and power, transforming raw resources into vital energy sources.
FOB vs CIF
NTEK Trading Company emerged in the 2000s as a thriving entity, offering exceptional business services in the field of production and export of Oil Derivatives, and boasting a team of accomplished managers.
With a skilled workforce, access to cutting-edge information, and strategic collaborations across multiple countries, Ntek has sustained a trajectory of continuous growth. Drawing from its vast experience in various industries, encompassing trade, production, and services, Ntek has garnered noteworthy accomplishments, serving our country and achieving excellence.
Leveraging its full potential, the company actively engages in diverse commercial activities, including the import and export of petroleum products from Iran, Iraq, Russia, Turkmenistan, and Azerbaijan.
NTEK Co, an Iranian company, aspires to establish a robust global presence, capitalizing on the knowledge gained from previous years and its dedicated and capable team. Presently, our focus lies in fostering collaboration among large importing companies, facilitating the exchange of information and technology, and creating a business consortium to address mutual needs.
We extend an invitation to join us in this endeavor, aiming to enhance our collective achievements for years to come. Our commitment is to earn your trust through our unwavering dedication, as it remains our primary duty and objective.
NTEK.CO currently maintains offices in Iran, Oman, and Turkey, while also collaborating with offices in Dubai, Malaysia, and Iraq.
