– The seller and buyer in transferring goods need to know what the CIF concept is?
– Do individuals involved in shipping and receiving goods need to clearly understand the regulations in CIF conditions?
– Sellers and buyers do not know how to apply CIF effectively, when should they buy CIF?
The regulations related to CIF conditions, the role and obligations of the seller and the buyer in Incoterm will be Proship.vn in the most detailed way to maximally satisfy all the problems you pose. Most especially, the notes when using CIF, the cases where it is necessary to buy CIF Incoterm 2010 are also pointed out. Interested readers can refer to this to master basic knowledge & find for themselves a suitable and reliable sea freight transport unit.
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
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What are CIF terms?
What is CIF ? CIF is understood as delivery conditions, that is, delivery at the port of discharge: "Cost, Insurance, Freight" . Normally, this condition is often written next to any seaport name (for example: CIF Haiphong). Basically, CIF divides responsibilities and risks between buyers and sellers in International Trade.
With this CIF condition, the seller must bear the costs of hiring a ship and insurance to the port of discharge. In the example above with CIF Hai Phong, you understand that the seller will buy insurance and ship the goods to Hai Phong port, the buyer receives the goods and continues with the procedures from this delivery location.
With CIF terms, you need to note that risk transfers from the loading port and not at the unloading port. The seller only buys marine insurance on behalf of the buyer, then they send the insurance policy to the buyer along with all necessary documents. The new buyer is the insured. Therefore, if loss occurs during transportation, the buyer, not the seller, will claim insurance compensation for the damage. In other words, as long as the delivery basis is CIF, the seller pays the shipping fee but does not bear the risk of the goods on the sea transport stage.
Find out the latest regulations in CIF conditions
After learning about the concept of CIF, the regulations related to the obligations of sellers and buyers under CIF conditions are also content that needs to be clearly understood, specifically as follows:
| RESPONSIBILITIES OF THE SELLER | BUYER'S RESPONSIBILITY |
| Delivery of goods: The seller delivers the goods, providing a commercial invoice, or equivalent electronic document, providing evidence of delivery (bill of lading). | Payment : The buyer pays the purchase price to the seller as stipulated in the sales contract |
| Licenses and procedures : The seller provides an export license, or authorization letter from the locality for the export shipment. | Licenses and procedures : The buyer carries out customs clearance and applies for an import license for the goods |
| Contract of carriage and insurance : The seller contracts to insure the goods under normal insurance terms and bears the costs of transporting the goods to the named port on an ocean-going vessel (or perhaps a vessel used in inland waterways). | Contract of carriage and insurance : The buyer is not obliged to enter into contracts of main carriage and insurance for the shipment. With CIF, this obligation belongs to the seller |
| Delivery : The seller is responsible for delivering the goods on board the vessel at the named port. | Receiving goods : When the seller delivers the goods, the buyer is responsible for receiving the goods delivered at the designated port of discharge. |
| Transfer of risk : The seller's risk transfers to the buyer when the goods are delivered over the ship's rail. | Transfer of risk : The buyer bears all risks of damage and loss after the goods have been delivered on board. |
| Freight: The seller bears all costs to put the goods on board, loading costs and transportation costs to the port of discharge, insurance costs, customs declaration, and payment of export taxes and fees. other in the exporting country. | Freight: The buyer bears all costs related to the goods arising after the time the goods are delivered on board the ship. The costs the buyer must pay are also related to unloading the goods at the port of destination, (unless it is specified in the contract that these costs are borne by the seller), import tax fees and customs clearance procedures. |
| Notification to Buyer : When the goods begin to be shipped, the seller informs the buyer about the condition of the goods after that time. | Notification to seller : The buyer must notify the seller of information regarding the shipping period of the shipment, the name of the designated port of discharge. |
| Proof of delivery, shipping documents or equivalent electronic documents : When the original set of documents is printed after the goods are delivered on board, the seller is obliged to transfer the full set of documents at his own expense. This is for the buyer. | Proof of delivery, shipping documents or equivalent electronic documents : The buyer accepts the seller's shipping documents in appropriate forms. |
| Inspection : The seller bears the costs for inspection, quality management, measurement, weighing, counting, packaging and marking of goods. If special packaging is required, the buyer notifies the seller of the additional costs and the buyer bears these additional costs. | Testing : Unless there are mandatory quarantine barriers in the exporting country, costs for inspection and testing must be paid in advance by the buyer. |
| Other Obligations : The seller assists in obtaining required additional documents relating to the goods. | Other obligations : Assist sellers in providing additional documents when requested. |
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
In what cases should I buy CIF and what should I keep in mind when using it?
When should I buy CIF?
CIF is considered a beneficial term for Small & Medium Enterprises or Enterprises that are new to international trading and do not have a large quantity of goods. In this clause, the buyer's responsibility for the goods is higher than the seller's, but in terms of costs, they will have to bear less because the seller has to bear the sea freight costs... bringing the goods to the buyer's country.
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It should be understood that CIF can cost the buyer more money because the seller works directly with the carrier, getting the price they want as a way to make more profit. Besides, when the quantity of goods is larger, buyers may have difficulty controlling the goods. Because from the time the goods are loaded onto the ship, the seller is no longer responsible for the goods, so if any problem arises during transportation, the seller may not be able to handle it promptly. Arrives slowly to buyers due to having to go through intermediaries.
Things to note when using CIF?
CIF terms only apply to packages delivered by sea and inland waterways. According to the provisions of CIF conditions, even if the shipping company requires the seller to deliver the goods/deliver the Container at an ICD or a major seaport, once the goods are on the ship, the seller will no longer be responsible for the risk.
In case the shipping company requires the seller to unload the container at the ICD, the route from the ICD to the port is usually arranged by the shipping company itself and the seller will not be able to control the risks to his goods. all this way. If unfortunately a risk occurs, the seller must bear it, not the buyer. The conflict here can be understood as the shipping company (hired by the buyer) made a mistake in transporting from ICD to a major seaport, causing the goods to be damaged but the seller must bear the loss.
Therefore, the seller needs to remember that, if delivering goods by Container, the shipping company requires the seller to deliver the goods at ICD as above, then the seller should switch to using CIP terms instead of using CIF so that the seller can Responsibility ends as soon as the goods are delivered to the shipping company at ICD.
The seller pays the freight to hire the ship to the destination port, but the seller only bears the risks related to the goods until the goods are on board the ship.
All risks for the goods on the sea and onward in the buyer's country are borne by the buyer.
If you are interested in the concept of what CIF conditions are and the related regulations in CIF , you can refer to the article shared above to have a basis for clearly defining specific responsibilities for both parties (seller & seller). buy). At the same time, if individuals involved in Incoterm want to hire a door-to-door transportation and delivery service at the request of the seller or buyer, please contact hotline 0909 344 247 for advice. , free support & quick quote for you.
Shipping contact hotline:
Ms Tien: 0909 986 247
Ms Dung: 0939 999 247
Ms Duy: 0902 581 247
