All Incoterms 2020 rules

CIF Cost, Insurance and Freight

CFR plus a cargo policy: the seller pays the freight and insures the voyage for the buyer.

Sea and inland waterway only

Under CIF the seller loads the goods on board, pays the freight to the named port of destination and takes out cargo insurance in the buyer’s favour. Risk still passes at loading, exactly as under CFR — the difference is that the buyer now has a policy to claim on. The required cover is the minimum one: Institute Cargo Clauses (C), at 110% of the contract value in the contract currency.

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Risk passes at
On board the vessel
Export clearance
Seller
Import duty & taxes
Buyer
Cargo insurance
Seller — Clauses (C)

The journey, stage by stage

Every stage of the shipment in order, and who pays for it.

  1. 1 Packing the goods for export Seller pays
  2. 2 Loading onto the collecting vehicle Seller pays
  3. 3 Inland carriage to the port or terminal Seller pays
  4. 4 Export customs formalities Seller pays
  5. 5 Terminal handling at origin Seller pays
  6. 6 Loading onto the main carrier Seller pays
  7. Risk passes to the buyer The moment the goods are on board the vessel at the port of shipment — the insurance is what covers the buyer from there. The seller still pays for 1 more stage below this line.
  8. 7 The international freight Seller pays
  9. 8 Terminal handling at destination Whether discharge and terminal handling at destination are already inside the freight the seller booked depends on that contract of carriage. It is the most common double-billing dispute on the four C-rules, and the reason this cell is not a flat yes or no. Per contract
  10. 9 Import customs, duty and taxes Buyer pays
  11. 10 Inland carriage to the final destination Buyer pays
  12. 11 Unloading at the final destination Buyer pays

What the seller does

  • Pack the goods, clear them for export and load them on board.
  • Contract the carriage and pay the freight to the named port of destination.
  • Buy cargo insurance on Clauses (C) for 110% of the value and hand the policy to the buyer.
  • Provide the transport document for the named destination port.

What the buyer does

  • Carry the risk from the moment the goods are on board at origin — and claim on the seller’s policy if something happens.
  • Pay discharge and terminal charges at destination unless the freight covers them.
  • Clear the goods for import and pay duty and taxes.

Use it when

  • Bulk and breakbulk sold on documents, where a bank wants an insurance certificate in the set.
  • Letters of credit — CIF produces exactly the document trio a credit usually calls for.

Watch out for

  • Clauses (C) covers a short list of named perils. It does not cover ordinary handling damage or theft — if the cargo is high-value, agree Clauses (A) instead and write it into the contract.
  • Incoterms 2020 raised the cover for CIP to Clauses (A) but deliberately left CIF at (C), because CIF is used for bulk. The two rules no longer insure alike.

CIF is a sea rule and prices goods to the destination port — not to the buyer’s warehouse. For containers, its any-mode twin is CIP.

Compare with

CFR Cost and Freight CIP Carriage and Insurance Paid To FOB Free On Board

Sources for this page

Every payer cell on these pages was checked against several published references, and the two cells those references disagree on are drawn as “per contract” rather than resolved by picking a side. This is a summary for orientation, not legal advice — the contract and the ICC text govern.

  1. Incoterms® 2020 International Chamber of Commerce

    The rules themselves. The authoritative text is ICC publication no. 723E, which is not free — this page is a summary of it, not a copy.

  2. Incoterms Wikipedia

    Risk transfer point, export and import clearance and the insurance clauses for each of the eleven rules; the 2010 to 2020 changes; what the rules do not cover.

Selling or buying on CIF terms? Follow the shipment from handover to arrival — whoever holds the number can track it.

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CIF FAQ

Under CIF the seller loads the goods on board, pays the freight to the named port of destination and takes out cargo insurance in the buyer’s favour. Risk still passes at loading, exactly as under CFR — the difference is that the buyer now has a policy to claim on. The required cover is the minimum one: Institute Cargo Clauses (C), at 110% of the contract value in the contract currency.

Risk passes to the buyer the moment the goods are on board the vessel at the port of shipment — the insurance is what covers the buyer from there. The seller then goes on paying for the journey well past that point, which is what makes CIF easy to misread: paying for a leg and carrying the risk on it are two different things here.

The seller pays the freight to the named port of destination and the insurance premium. Export clearance is the seller’s and import duty and taxes are the buyer’s. Cargo insurance is compulsory and the seller buys it.

Whoever contracted the carriage holds the transport document, and its number is what a lookup needs. Enter a bill of lading, booking or container number in the container tracking app, an air waybill in the air cargo tracker, or make the same lookup one REST call with the API reference.

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