The meaning of acronyms FOB and CIF is related to the freight payment in the maritime transport of goods. These acronyms are used to distinguish between buyer and supplier who bears the freight costs, that is, who bears the costs and risks of transport.
FOB and CIF are the abbreviations of the English expressions Free On Board (FOB) and Cost, Insurance and Freight (CIF). They are part of the Incoterms (International Trade Terms) which are defined norms for international commercial exchanges.
FOB shipping (Free on board)
The acronym FOB means free on board and in Portuguese it can be translated as “free on board”. In this type of freight, the buyer assumes all risks and costs with the transport of the goods as soon as they are placed on board the ship. At the supplier's expense and risk is the obligation to place the goods on board, at the shipping port designated by the importer.
CIF (Cost, Insurance and Freight) freight
CIF is the acronym for Cost, Insurance and Freight, which in Portuguese means “
Cost, Insurance and Shipping”. In this type of freight, the supplier is responsible for all costs and risks with the delivery of the goods, including maritime insurance and freight. This responsibility ends when the goods arrive at the port of destination designated by the buyer.Who pays the shipping?
The acronym CIF means that the shipping and insurance are paid by the supplier, which is responsible for delivery to the destination. In the case of FOB, the customer pays for freight and insurance for the goods in question.