Compare the paid freight and insurance obligations
FOB, CFR and CIF are sea and inland-waterway rules. Risk transfers when goods are on board at origin. Under FOB the buyer arranges main carriage; under CFR and CIF the seller pays freight to the named destination port. CIF also requires seller-arranged insurance.
Write the named loading port for FOB or destination port for CFR/CIF, together with Incoterms® 2020. If goods are handed to a carrier at a container terminal before vessel loading, discuss whether a rule such as FCA or CIP better matches the actual handover.
Build a port-to-port quotation comparison
- Record the origin collection and export tasks included in the supplier’s price.
- Identify the loading port, destination port, routing and transport service being compared.
- Separate the ocean freight from destination terminal, release, customs and inland delivery charges.
- For CIF, obtain the insurance evidence and review the insured journey, exclusions, deductible and claims procedure.
- Confirm how changes in packed measurements, equipment or sailing affect the quotation.
- Ask who receives shipping documents and who authorises release.
Do not treat a CIF or CFR price as a completed delivered-to-warehouse cost. The buyer still needs to understand the destination tasks and its import responsibilities. Put any additional services in writing.
A seller paying the main freight does not mean the seller retains transit risk until arrival. Discuss insurance for the period in which your business carries the risk, including any inland legs outside the offered policy.
Check the term against the shipment handover
Does CIF include import duties and delivery to my warehouse?
CIF names a destination port. Check import and inland delivery arrangements separately; a warehouse delivery commitment needs an express service scope.
Is CIF insurance automatically enough for my cargo?
Review the actual policy and required cover. The default insurance obligation may not match the cargo value, risks or routes you want protected.
Can I use FOB for air freight?
FOB is a sea and inland-waterway rule. Select an appropriate all-mode rule for air freight with your contracting parties.
Use ocean freight services and the shipping cost guide to compare the full route. Share your supplier’s term and named port when requesting a quote.
Reference: ICC Incoterms® 2020 checklist. Check the current official requirements for your shipment.