Quick Answer: What Is Difference Between CIF And CFR?

What is CFR meaning in shipping terms?

Cost and freightCost and freight (CFR) is a legal term used in foreign trade contracts.

In a contract specifying that a sale is cost and freight, the seller is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain them from the carrier..

How are CIF charges calculated?

In order to find CIF value, the freight and insurance cost are to be added. 20% of FOB value is taken as freight. Means USD 200.00. Insurance is calculated as 1.125% – USD 13.00 (rounded off).

What is FOB CIF and CNF?

What does it mean to ship Freight on Board (FOB) as opposed to Cost Insurance and Freight (CIF) or just Cost and Freight (CNF)? … CIF means they will pay for the cost, the insurance and the freight, where CNF means the consignee is responsible for the insurance only.

What are the differences between FOB CFR and CIF?

With CIF/ CFR agreements, the seller has a wider responsibility as has to arrange and pay for the transportation of the goods to a remote place; under the FOB term, instead, the seller is responsible to deliver the goods cleared for export at a departure port (generally in its own country).

Who pays freight in CFR?

Under a cost and freight (CFR) agreement, the seller has a weightier responsibility for arranging and paying for transportation the ordered products. For goods shipped CFR, the shipper is responsible for organizing and paying for the shipping of the products by sea to the destination port, as specified by the receiver.

Which is better CIF or CFR?

Key Takeaways. Cost and freight (CFR) and cost, insurance, and freight (CIF) are terms used in international trade for the shipping of goods by sea. … CIF is similar to CFR, except it also requires the seller to take out an agreed amount of marine insurance to protect against the loss, damage, or destruction of the order …

Which is better FOB or CIF?

Cost, Insurance and Freight and Free on Board are international shipping agreements used in the transportation of goods between a buyer and a seller. CIF is considered a more expensive option when buying goods. FOB contracts relieve the seller of responsibility once the goods are shipped.

What is cost of freight?

Freight cost is the the price incurred to ship your goods. Your freight cost is determined by a number of variables, such as how far your shipment needs to go, what its density or volume is, whether or not accessorials are needed, as well as fluctuating fuel costs and truck capacity.

Does CIF include unloading?

If CIF is the customs valuation basis, the costs of unloading the vessel, clearing customs, and delivery to the buyer’s premises in the country of destination—including inland insurance—must be deducted to arrive at the CIF value.

Does CFR include customs clearance?

Duty and customs clearance CFR includes import customs duty, which is borne by the buyer. Once the goods are dropped by the seller at the designated port, the unloading of goods rests with the buyer.

What is FOB and CIF value?

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. The seller meets cost of goods, freight and marine insurance.