FOB and CIF prices are comparable only when product, quantity, ports, timing, cost boundary, risk point, insurance and destination exclusions are aligned. Under Incoterms® 2020, both are sea/inland-waterway terms and risk transfers when goods are on board at the shipment port; CIF also requires the seller to contract carriage and insurance to the named destination port.
Check whether these terms fit
Containerised goods are often handed to a carrier before loading on board. Review the ICC’s current Incoterms® 2020 checklist with a freight professional; FCA/CPT/CIP may fit some movements better.
Normalize both offers
| Field | FOB | CIF |
|---|---|---|
| Named place | Shipment port | Destination port |
| Main carriage | Buyer contracts | Seller contracts |
| Insurance | Buyer decides | Seller arranges required cover; buyer reviews adequacy |
| Risk transfer | On board at shipment port | Also on board at shipment port |
| Destination charges | Obtain full schedule | Identify charges outside seller’s contract |
Add origin charges outside scope, freight, insurance, terminal/deconsolidation charges, customs, duty/tax treatment, delivery, free time and receiving. The landed-cost worksheet provides the calculation frame.
Write the contract line precisely
Use “[term + named port], Incoterms® 2020,” then list assumptions and exclusions. Incoterms do not decide product quality, inspection, title, payment or governing law. Confirm carton and shipment data for the selected cling film configuration before requesting either option.