FOB vs CFR vs CIF: Which Shipping Term Should Food Importers Choose?
FOB, CFR and CIF are Incoterms that allocate certain costs, responsibilities and risks between seller and buyer. Always identify the named port and the agreed Incoterms version in the contract.
FOB — Free On Board
The seller delivers the goods on board the vessel nominated by the buyer at the named shipment port. The buyer arranges the main sea carriage. FOB is intended for sea or inland-waterway transport.
CFR — Cost and Freight
The seller arranges and pays carriage to the named destination port, but risk transfers to the buyer when the goods are on board the vessel at the shipment port. Seller-provided insurance is not required under CFR.
CIF — Cost, Insurance and Freight
The seller arranges and pays carriage to the named destination port and obtains the insurance cover required under the applicable rule. Risk still transfers at the shipment port when the goods are on board; CIF does not mean the seller bears all risk until arrival.
| Term | Main carriage | Seller insurance obligation | Risk transfer |
|---|---|---|---|
| FOB | Buyer arranges | No | On board at shipment port |
| CFR | Seller pays | No | On board at shipment port |
| CIF | Seller pays | Yes, under the rule | On board at shipment port |
Questions before accepting an offer
- Which Incoterms rule and version apply?
- What are the named shipment and destination ports?
- Which charges are included or excluded?
- What insurance coverage and exclusions apply under CIF?
- Who handles customs clearance, duties and destination charges?
- Which documents and shipment milestones are included?
Incoterms do not replace the sales contract or determine payment terms, ownership transfer or product quality obligations. Compare offers only when product grade, packing, quantity, delivery term and ports match.
Request an FOB or CIF quotation from D’Amalfi Global with product, quantity and destination details.
Sourcing these lines?
Send the product, quantity and destination port — we reply with a proforma and a sample date.