What is the difference between CIF and FOB?

Business is a thing almost everyone is involved in one way or the other. But businesses vary in levels and sizes. Some businesses are on a subsistence basis while some others can be on a commercial basis in such a way that they even did on an international or intercontinental level. When it comes to this level of business and probably with huge products to be transported, then shipment is an important part of transporting the merchandise from one place to another. When it comes to the shipment of products like this, billing is also something that needs to be dealt with.

On the bill of shipment, there are two notes that are most likely to appear on the bill. "CIF" appearing on a bill of lading simply stands for cost insurance and freight. This indicates that the bill includes the price for the transported products, the insurance fee, and the payment for the shipment. On the other hand, FOB appearing on a bill stands for "free on board," which simply means that the producer of the transited product takes responsibility for the products and it is contained in the price quoted to the buyer.

FOB means Freight on Board while CIF means Cost, Insurance, and Freight. FOB will refer to the cost of the possible expenses that you have to pay when there is a package that is being delivered to the port nearest to you. Take note that from the port where the parcel will be received, you will be in charge of paying the fees from the port going to your doorstep.

CIF is almost similar, but there are just some slight differences with the cost of transportation and the insurance that will be used. It is best that you get to know the main differences between the two so you will know how to use them properly.