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Re: Shipping Terms
Great question. Could someone please explain the definitions? I know FOB means free on board. I'm preparring to buy my first import to the USA, but do not know what those phrases mean.
Re: Shipping Terms
Buyer: CIF is safer
Seller: FOB is safer
depend on yourself

It just depend on who you are?seller or buyer?

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There is not a way to decide which Incoterm is safer. when you sell FOB (Free on Board), your responsibility ends as soon the cargo has been placed into the vessel. When you sell CIF (Cost, Insurance, Freight), your responsibility ends as soon the vessel arrives to the destination port.

The main issue is how you handle the payment method if you are exporter. Even in you sell CIF, CFR, EXW, FOB, be sure you have the control of the payment instrument.

If you are an exporter, my suggestion is to always request a Confirmed, Irrevocable, At sight Documentary Letter of Credit for the 100% of the goods with all your customers. Many chinese buyers refuse to do this because they know you will cash your letter of credit in the moment you have all the goods shipped or delivered, and the Bill of ladings has been issued.

If a buyer's company insist they can't or they won't confirm a letter of credit, DON"T SELL. You will be in the hands of the buyer and they can take a long time to decide when to pay. That can be very harmful for you and your company.
Re: Shipping Terms
[em2]FOB need you arrange the shippment, CIF is better for Buyer ,The Buyer only need pay the money and then receive the goods .
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depend on yours
Re: Shipping Terms
FOB- gives buyer control on the shipment and all shipment costs( ofr+freight additionals and local costs in port of discharge)
CIF - might seem easier for the buyer, though consignee should take under consideration destination handling charges of which unexperienced buyer might no be aware of.
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[em17]ex-works or fob are all fine providing the consignee can arrange ther the freight service .
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If you trust Supplier Choose CIF .

If don't trust better to use FOB and this is better for returnning or rejecting.

Also as always owning the original shipping Documents help you to have something in your hand.


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There's another question behind the question: which lowers your risk most? The key is not the shipping, but making sure the goods that are shipped are the RIGHT goods. Which means checking thoroughly before shipping. Which in many cases means you should NOT go for the lowest price in the first place, but go for the more reliable supplier. To avoid problems it is even better to do the checking WHILE the product is being made. Find a reliable company to do this or do it yourself and you won't have to worry about CIF or FOB!

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