What are the popular explanations of cif, fob and CFR? What is the difference?

The popular definitions of CIF, FOB and CFR are as follows:

Cost insurance and freight named port of destination (CIF) is a traditional and commonly used international trade term. When using this trade term, In addition to undertaking the same obligations as "cost plus freight", the seller should also be responsible for the transportation insurance of the goods and pay the insurance premium, but the seller's obligation is limited to the lowest insurance coverage, that is, FPA. As for the risks of the goods, they are the same as "cost plus freight" and FOB delivery conditions, and they are all transferred by the seller to the buyer when the ship at the port of shipment crosses the ship's rail.

cost and freight (named port of destination, abbreviated as CFR), the original abbreviation of the term cost and freight is C& F, it is a traditional and commonly used international trade term. When adopting this trade term, the seller is responsible for concluding a contract of carriage, loading the goods to the ship at the port of shipment and paying the freight for transporting the goods to the destination according to the time stipulated in the sales contract. However, the risk of loss or damage of the goods after crossing the ship's rail at the transshipment port and all the extra expenses caused by accidents shall be borne by the buyer. This is different from the term FOB.

FOB (Free on board ... named port of shipment) is a traditional and commonly used international trade term. When using this trade term, the seller must deliver the goods to the ship designated by the buyer at the loading port stipulated in the contract and at the specified time to fulfill its delivery obligation. The expenses and risks related to the goods borne by the buyer and the seller are bounded by the ship's rail, and the risks and expenses before the goods are loaded at the port of shipment and cross the ship's rail shall be borne by the seller, and then transferred to the buyer and borne by the buyer. The FOB conditions at the port of shipment require the seller to be responsible for export customs clearance procedures, including applying for export license, customs declaration and paying export duties.

Differences between CIF, FOB and CFR price terms:

1. The nature of ports after price terms is different. The ports after FOB refer to the ports of the seller's country, while the ports after CFR and CIF refer to the ports of the buyer's country.

2. The cost composition is different, and the quotation is different. FOB price considers all the expenses and profits of the goods from the purchase of raw materials to the production until the goods are loaded into the cabin designated by the buyer, while CFR is based on FOB price plus sea freight, while CIF is based on FOB price plus sea freight and insurance premium.

3. The payment objects of terminal operation fees are different. According to the principle that whoever pays the sea freight shall pay the THC fee, the THC fee in FOB price terms shall be borne by the buyer, and the THC fee in CFR and CIF shall be borne by the seller. The current domestic THC standard is 2' for 37 yuan and 4' for 56 yuan, and the THC fee shall be clearly indicated in the trade contract.

4. The payment and handling of insurance premium are different: FOB and CFR insurance shall be handled by the buyer, and the seller shall inform the buyer before shipment; CIF insurance shall be handled by the seller and the insurance premium shall be paid. The seller shall handle the insurance according to the contract terms and insurance clauses and hand over the insurance policy to the buyer.

5. The time for notifying the buyer of the shipment notice is different: FOB price and CFR inform the buyer before shipment, and the contents and details of the shipment so that the buyer has enough time to apply for marine insurance of the goods, while CIF is insured by the seller, and the shipment notice can be notified to the buyer within a few days after shipment.

Similarities among p>CIF, FOB and CFR:

1. All three price terms are applicable to sea transportation and inland river transportation, and their carriers are generally limited to shipping companies.

2. The delivery point of the three price terms is the ship's rail at the port of shipment, and the risk point is transferred from the seller to the buyer after crossing the ship's rail at the port of shipment.

3. Cost point: The seller shall bear all expenses until the goods cross the ship's rail at the port of shipment.

4. bill of lading: the seller shall submit the clean on-board bill of lading to the buyer.

5. Shipping advice: The seller shall issue shipping advice to the buyer in time before and after shipment.

6. Risk point: The risk will be transferred to the buyer after the seller loads the goods at the port of shipment.

7. The buyer shall be responsible for the import customs clearance and fees at the destination port; Shipment, land transportation, export declaration and licensing at the port of shipment shall be handled by the seller.

8. The seller has the obligation to make arrangements for booking the shipping space and allocating the ship at the port of shipment.