Logistics knowledge

Differences between FOB,CIF,C&F,CFR

FOB

Free on Board, FOB, (agreed port of departure), maritime condition.

The transfer off costs will occur after placing the goods on board of the ship in the port of departure or after the goods are loaded. The transfer of risks also takes place at that time, in other words, the critical point of costs is equal to the critical point of risk transfer. The ship’s rail, traditionally a symbolic barrier between the seller and buyer, has been abolished. The seller has fulfilled his obligation to deliver when the goods are placed / loaded on board of the (by the buyer) nominated and named vessel at the port of departure. 


CIF

Cost, Insurance and Freight (agreed port of destination) (CIF), maritime condition.

The transfer of costs will occur after placing the goods on board of the ship in the port of departure or after the goods are loaded. The transfer of risks also takes place at that time, in other words, the critical point of costs is equal to the critical point of risk transfer, just like FOB.

The seller has fulfilled his obligation to deliver when the goods are placed / loaded on board of the (by the seller) nominated and named vessel at the port of departure. This is also equal to FOB and CFR. The insured value of goods is normally 110% of invoice value.


CFR

Cost and Freight, CFR, (agreed port of destination), maritime condition.

The transfer of costs will occur after placing the goods on board of the ship in the port of departure or after the goods are loaded. The transfer of risks also takes place at that time, in other words, the critical point of costs is equal to the critical point of risk transfer, just like FOB. The ship’s rail, traditionally a symbolic barrier between the seller and buyer, has been abolished. The seller has fulfilled his obligation to deliver when the goods are placed / loaded on board of the (by the seller) nominated and named vessel at the port of departure.


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