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INCOTERM FOB versus CIF

INCOTERM FOB versus CIF

When you buy or sell fertilizers across national boundaries, you and the Triferto must have a clear understanding of the terms for moving those goods to their destination. CIF and FOB are commonly used agreement models for international container shipping of fertilizers. Each type of agreement specifies which party is responsible for the goods and the point at which responsibility transfers from the seller to the buyer.

FOB
FOB stands for Free On Board. With the FOB type of shipping agreement, Triferto arranges for the fertilizers to be moved to a designated point of origin. Normally this is a port (Rotterdam or Antwerp) because FOB and other INCOTERM contracts are mainly intended for maritime shipping

CIF 
When a CIF — Cost, Insurance and Freight — shipping agreement is used, Triferto has responsibility for the cost of the fertilizer container in transit, providing minimum insurance and paying freight charges to move the goods to a destination chosen by the buyer. From the point of delivery at the destination, the buyer assumes responsibility for unloading charges and any further shipping costs to a final destination.

Difference 
The crucial difference between an FOB and a CIF agreement is the point at which responsibility and liability transfer from Triferto to buyer. With an FOB shipment, this occurs when the shipment reaches the port or other facility designated as the point of origin. With a CIF agreement, Triferto pays costs and assumes liability until the goods reach the port of destination chosen by the buyer.