FOB vs CIF: what is the difference?
Quick answerFOB: seller handles export clearance and origin charges; buyer books freight and insurance. CIF: seller books freight and insures to destination port (minimum cover). CIF gives the seller more control over the cargo and the release process; FOB gives the buyer control over routing and often better rates.
Cost and control
FOB: buyer chooses carrier, so the seller loses visibility and leverage over release.
CIF: seller controls booking and can hold the B/L until payment — useful when payment risk is high.
CIF insurance is minimum cover (Institute Cargo Clauses C); high-value cargo needs more.
Which to offer
New or unsecured buyers: quote CIF/CFR to retain leverage.
Sophisticated buyers with their own forwarders: FOB is normal.
State the Incoterms version (2020) in the contract.
| Item | FOB | CIF |
|---|---|---|
| Ocean freight | buyer | seller |
| Insurance | buyer | seller (minimum) |
| Booking control | buyer | seller |
| Release leverage | low | higher |
| Risk transfer | on loading | on loading |
Frequently asked questions
- Does CIF include destination charges?
- No. CIF ends at the destination port; THC, clearance and delivery are the buyer’s.
- Can I mix FOB and CIF?
- Not within one shipment; choose one term per contract and state it clearly.
Need a live rate for your lane? Search free on jhz56.com — 20GP / 40GP / 40HQ quotes from multiple forwarders, no sign-up required.
Related
qa/incoterms 2020 explained
qa/what is ddp shipping
Rates from China to all countries
Weekly China export freight index
Source: Juhe Zhuang rate platform (jhz56.com) market data and carrier documentation. Figures are reference ranges, not transaction prices; verify with your forwarder before booking.