FOB vs CIF

FOB and CIF allocate certain costs, tasks and risks differently. The correct comparison depends on the applicable Incoterms edition, named ports and the exact contract.

At a glance

Both terms are for sea and inland waterway transport.

FOB means Free On Board. CIF means Cost, Insurance and Freight.

Under the Incoterms rules, these terms are intended for sea and inland waterway transport. Other terms may be more appropriate for containerized or multimodal shipments. Confirm the chosen term and named place in the sales contract.

Comparison

Responsibilities are not the same as risk.

High-level overview only. Refer to the exact Incoterms edition named in the contract.

Area	FOB	CIF
Transport mode	Sea or inland waterway	Sea or inland waterway
Main carriage	Typically arranged by the buyer	Seller arranges and pays carriage to the named destination port
Insurance	No seller insurance obligation under FOB	Seller arranges the insurance cover required by the applicable CIF rule
Risk transfer	When goods are delivered on board at the named shipment port	Also transfers when goods are delivered on board at the shipment port, not on arrival
Import process	Buyer handles import-side obligations under the agreed term	Buyer handles import-side obligations under the agreed term

Choose carefully

Neither term is universally better.

The appropriate term depends on cargo, transport mode, buyer and seller capabilities, route and negotiated contract.

State the named port and Incoterms edition clearly. For a current authoritative explanation, consult the International Chamber of Commerce’s Incoterms rules and qualified trade professionals.

Check ICC Incoterms information

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This is a high-level educational comparison, not legal advice. The exact obligations depend on the Incoterms edition and contract wording.