Nautical Term: CIF
Definition of CIF
Cost, Insurance and Freight (CIF) is a term used in international trade to denote the total cost to the buyer for transporting the goods from the seller’s port to the buyer’s destination. This cost comprises of the cost of the goods, insurance cost for the goods during transit, and freight cost for the transportation of the goods. According to the incoterms (International Commercial Terms), the seller’s responsibility under CIF ends when the goods are placed on board the vessel at the seller’s port of shipment. After this point, all risks and responsibilities for the goods are transferred to the buyer.
Example: The seller agrees to sell 100 metric tons of steel balls at a CIF price of $50,000 to the buyer in Shanghai, China. According to the terms of the sale, the seller will be responsible for all the costs, insurance and freight up to the point where the goods are loaded on board the vessel at the seller’s port of shipment. After this point, all risks and responsibilities for the goods are transferred to the buyer.
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