Resources · Commercial
FOB, CFR and CIF: who does what.
Three sea-freight rules, one recurring confusion. Here is who books the vessel, who insures the cargo, and the trap hidden in the word 'landed'.
Rule
Vessel booked by
Insurance by
Risk transfers
Duty & import
FOBFree On Board
Buyer
Buyer
Goods on board at origin
Buyer's account
CFRCost & Freight
Seller
Buyer
Goods on board at origin
Buyer's account
CIFCost, Insurance & Freight
Seller
Seller (agreed cover)
Goods on board at origin
Buyer's account, always
The three points people miss
- CIF is not landed cost. Destination duty, taxes and import charges are never inside CIF, the importer carries them.
- Risk moves at origin under all three. Under CFR and CIF the seller pays for carriage to the destination port, but the risk of loss in transit is the buyer's from loading, which is why the insurance question matters.
- Containers often fit FCA better than FOB. Containers are handed over at the yard, not the ship's rail; FCA closes that gap. Worth discussing when the cargo is containerised, which solar and glass cargo is.
State the rule and the named port in your RFQ and the quotation returns on that basis. The full table of eight rules Torix works with, including FCA, CPT, CIP and DAP, is on the Incoterms 2020 page.
Put it to work
Basis chosen? Quote on it.
Send the drawing, datasheet or bill of materials with quantity, destination and timing, the desk reviews the requirement and returns with manufacturing options and structure.