CIF and FOB: Learn About These Two Types of Freight

By | June 15, 2019

Hiring freight involves issues that go beyond the price charged send documents abroad. Price (ส่ง เอกสาร ไป ต่าง ประเทศ ราคา, which is the term in Thai) is equally important to define the responsibilities. For this, there are inter connection. We’ll talk about two of them in this post: the CIF and the FOB.

When choosing the person in charge of the service, factors such as quality level, company certifications, service history and freight value are taken into consideration on a regular basis, as if it were on the agenda of a request for quotation.

CIF and FOB

Continue reading to learn more and understand which option is best for your company!

By whom and when are payments made?

CIF

As the responsibility is of the supplier, payment for the service is made at the origin of the transportation. That means he’s responsible for the payment. In most cases, freight and insurance costs are already included in the sale price.

Fob

In this case, it is the customer who makes the payment of freight and cargo insurance. Generally, payment is only made upon receipt of the goods, or a deadline can be negotiated with the carrier.

As the carrier is usually chosen by the customer, partner companies that already have aligned payment forms and deadlines are selected.

How are the costs specified?

CIF

Since, in this case, the value of the freight is embedded in the value of the goods, the amount passed on to the buyer is only one. For collection purposes, the shipper can either specify the value of the transport or collect separately (including this information in the field intended for this purpose).

Fob

The contracting is done by the buyer and, therefore, the freight is not included in the price of the goods – being necessary to specify this information. In this case, the value must be the tax base.