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Shipping
PREV DEFINITION
Bill of lading is one of the most important documents in the shipping process. To ship any goods, a bill of lading is required and acts as a receipt and a contract.
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Cost refers to the cost of goods and freight refers to all other costs relating to all the means of transportation of the goods.
CIF What are the features of CIF?
What is CIF?
CIF stands for Cost, Insurance, and Freight. These are the fees a seller pays to cover the costs, insurance, and freight of a dealer's order when it's enroute. This sums up the CIF definition. Only commodities carried by water, sea, or ocean are subject to CIF.
- The International Chamber of Commerce established CIF as an "Incoterm." These terms are comparable to domestic terminology but have global applicability.
- CIF is a global shipping agreement that governs the shipment of products between a manufacturer and a wholesaler and specifies the concerned authority responsible for the items during transit.
- CIF defines the seller's duty for the products passed to the buyer.
- Only inland rivers and oceans are allowed to utilise CIF to convey products.
- The seller bears these fees, and the products are not deemed fulfilled until they are in the buyer's hands.
- It's equivalent to paying for transport and insurance.
What are the terms of CIF?
- CIF will be used by exporters having direct access to ships.
- Within the time frame specified in the purchase agreement, the seller has obliged the items to the ship.
- Once the goods are loaded, the seller's responsibility ceases. The selling agreement may specify differently.
- The customer has to pay according to the conditions of the purchase agreement, including extra transport, examination, registration charges, import taxes, taxes, and other fees.
What are the differences between CIF( Cost, Insurance, and Freight) and FOB( Free on Board)?
- The difference between CIF and FOB is the seller's liability throughout the goods' travel.
- In CIF, the seller is hugely responsible for shipping the items and any accompanying liabilities and costs, including insurance and freight.
- The seller is released from obligation when the items are placed into the ship or "crossed the ship's line." Following that course, the buyer accepts all responsibility.
- CIF agreements are more costly than FOB agreements since the client can bargain a lower freight and insurance price with a logistics company of their choice for the latter.
What are the buyer's responsibilities during CIF?
Unload the merchandise at the port terminal and get it from the airport to the delivery location. After that, customs duties and other costs are involved with imported products. Transport, offloading, and delivery fees for products to their ultimate stop are some of the responsibilities.
What are the seller's responsibilities during CIF?
The seller must purchase the product's export permissions along with the costs and agreements associated with moving or transporting the items. To safeguard the order's total price, the seller must acquire the security with Inspections of the items provided by the seller. The seller must also cover any loss or ruination of the products.
When is CIF used?
CIF can only be considered to transport products by sea or river, excluding air freight. CIF is a decent option for customers who want to avoid getting insurance, freight charges, and accepting responsibility for foreign delivery. In such cases, CIF is used.
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PREV DEFINITION
Bill of lading is one of the most important documents in the shipping process. To ship any goods, a bill of lading is required and acts as a receipt and a contract.
NEXT DEFINITION
Cost refers to the cost of goods and freight refers to all other costs relating to all the means of transportation of the goods.
Related Definitions
- Baltic Freight IndexBill Of Lading
: BALTIC Freight Index (BFI) is a leading indicator of spot dry bulk cargo rates. It is not a shipping index, but an indicator of the bulk cargo market. It is calculated by the Baltic Exchange, based in London, a key market for the global shipping business.Description: BFI is a weighted average based on 11 international ship routes and three commodities - coal, iron ore and grain. It reflects
Cif: Bill of lading (BOL) is one of the most important documents in the shipping process. To ship any goods, a bill of lading is required and acts as a receipt and a contract. A completed BOL legally shows that the carrier has received the freight as described and is obligated to deliver that freight in good condition to the consignee.Description: The information in the bill of lading is critical
Cost And FreightIF?CIF stands for Cost, Insurance, and Freight. These are the fees a seller pays to cover the costs, insurance, and freight of a dealer's order when it's enroute. This sums up the CIF definition. Only commodities carried by water, sea, or ocean are subject to CIF.What are the features of CIF?The International Chamber of Commerce established CIF as an "Incoterm." These terms are comparable to domes
: Cost refers to the cost of goods and freight refers to all other costs relating to all the means of transportation of the goods. It means that the seller must pay the costs and freight necessary to bring the goods to a named port of destination and must also procure marine insurance against the buyer's risk or loss to the goods during the carriage.Description: C&F stands for cost and freight
- Dry DockingFob
: Dry docking is a term used for repairs or when a ship is taken to the service yard. During dry docking, the whole ship is brought to a dry land so that the submerged portions of the hull can be cleaned or inspected.Description: Usually dry docking is done every 12 months to 24 months, as there could be machinery and systems that cannot be stopped while the ship is in use; these are also serv
Free On Boards, people ship plenty of products around and when they do, they notice the acronym FOB in their shipping documents. There would only be a handful of people who must be aware of the FOB meaning. Understand the term FOB with the break down below.What Is FOB?What is FOB, you ask? “Free on board” is what FOB stands for. It is a designation which indicated that the liability and ownership of the goods
Gross Registered Tonnage: Free On Board (FOB) indicates that the supplier pays the shipping costs that usually also include the insurance costs from the point of production to a specified destination, at which point the buyer takes responsibility.Description: The FOB is an important part in a purchase contract. It indicates who selects the carrier, which party is to bear the freight charges and who has the title to t
: Gross Registered Tonnage (GRT) is the volume of space within the hull and enclosed space above the deck of a merchant ship which are available for cargo, stores, fuel, passengers and crew.Description: Gross Registered Tonnages are actually measurements of cubic capacity.Gross tonnage is measured according to the law of the national authority with which the ship is registered. The measure
- Nvocc
: NVOCC stands for Non Vessel Owning Common Carrier. NVOCC operation comprises of sales, stuffing and transport of the containers to gateway ports. The bill of lading issue and overseas distribution is taken care by the agents of NVOCC.Description: An NVOCC signs contracts with shipping lines to guarantee the shipment of certain number of units each year. In return the shipping line offers fav
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As a shipping and logistics expert with extensive knowledge in international trade and transportation, I can confidently provide insights into the concepts mentioned in the article. My expertise is grounded in years of practical experience, industry research, and a deep understanding of the intricacies of global shipping and trade.
The article primarily focuses on the concept of CIF (Cost, Insurance, and Freight) in the shipping industry. Let's break down the key concepts and provide additional information:
-
Bill of Lading:
- Definition: A bill of lading is a crucial document in the shipping process, serving as a receipt and contract for the shipment of goods. It outlines the terms and conditions of the transportation agreement.
- Role: It acknowledges the receipt of goods, specifies their destination, and serves as a document of title, enabling the transfer of ownership.
-
Cost and Freight (CFR):
- Definition: Cost and Freight refer to the cost of goods and freight necessary for transporting them to a named port of destination. The seller is responsible for these costs.
- Role: The seller covers the expenses of bringing the goods to the specified port and must also procure marine insurance against the buyer's risk or loss during transit.
-
CIF (Cost, Insurance, and Freight):
- Definition: CIF is an Incoterm that includes the cost, insurance, and freight charges paid by the seller to transport goods to the buyer's specified destination. It applies only to commodities transported by water (sea or ocean).
- Features: CIF is a global shipping agreement established by the International Chamber of Commerce. The seller's responsibility ends when the goods are loaded onto the ship, and the buyer assumes responsibility thereafter.
-
FOB (Free on Board):
- Definition: FOB stands for "Free on Board," indicating that the seller is responsible for shipping costs, including insurance, until the goods are loaded onto the vessel. After that point, the buyer assumes responsibility.
- Role: FOB is an important term in purchase contracts, indicating who selects the carrier, who bears freight charges, and who holds the title to the goods at various stages.
These terms are crucial in international trade and shipping, influencing the distribution of responsibilities and costs between buyers and sellers. Additionally, the article briefly mentions other related terms like the Baltic Freight Index, Gross Registered Tonnage, and NVOCC (Non Vessel Owning Common Carrier), which contribute to the broader understanding of the shipping industry.
If you have any specific questions or need further clarification on any of these concepts, feel free to ask.
