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What do freight companies mean by "FOB" and "CIF"?


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Old 05-23-2008, 11:27 PM
trade trade is offline
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Default What do freight companies mean by "FOB" and "CIF"?

We are trying to get pricing to import some equipment from the EU into the US and the two quotes we have are marked with either FOB or CIF. What does this mean?
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Old 05-23-2008, 11:27 PM
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Default What do freight companies mean by "FOB" and "CIF"?

fob - freight on board
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Old 05-23-2008, 11:27 PM
gonorth gonorth is offline
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Default What do freight companies mean by "FOB" and "CIF"?

Freight On Board (FOB) means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays freight, insurance, unloading costs and transportation from the port of destination to his factory.

Cost, Insurance and Freight (CIF) is a common term when ocean transport is used.When a price is quoted CIF, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance.
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Old 05-23-2008, 11:27 PM
import import is offline
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Default What do freight companies mean by "FOB" and "CIF"?

FOB: Freight On Board
CIF: Cost, Insurance, & Freight
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Old 05-23-2008, 11:27 PM
John John is offline
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Default What do freight companies mean by "FOB" and "CIF"?

FOB = Free On Board.
CIF =Cost, Insurance and Freight

Assume, the equipment you want to import costs US$ 100 at London, the freight charges are US$20, and the Insurance charges are US$2. Also assume that the import duty is 10%. For calculating the import duty the CIF price of the equipment would be Cost+Freight+Insurance, that in this example would be 100+20+2=122, and the import duty would be 10% of 122 = US$12.2
Your total landed cost would be = 122+12.2 = US$134.2
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