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About This Site  amlinkint.com is a site dedicated to provide comprehensive information about China, a rapid growing country yet full of mysteries. There are two main categories of the information: business and travel. Business information include doing business in China, import from or export to China, product sourcing in China, Chinese cultures revealed, and China economy and its global impacts. Contained in the travel section are:  what you need to know when traveling to China, complete tour guide of major cities such as Beijing, Shanghai and Xi'an,  and how to find cheap travel services in China.

 

Import from China

Trade Terms >>

Cost and Freight - CFR  Vs. Cost, Insurance and Freight - CIF >>

 
 

  Cost and Freight  - CFR

 
 

Cost and Freight, abbreviated as CFR or CNF, is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. Under CFR, the seller does not have to procure marine insurance against the risk of loss or damage to the goods during transit. Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery, payment when the risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance.

The most commonly known trade terms are Incoterms, which are published by the International Chamber of Commerce (ICC site definition). These are often identical in form to domestic terms (such as the American Uniform Commercial Code), but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms. It's important to realize that because this is a legal term, its exact definition is much more complicated and differs by country. It is suggested that you contact an international trade lawyer before using any trade term.

Cost and Freight (CFR) is an Incoterm clearly defined in International Chamber of Commerce's publication 560 "Incoterms 2000".  It must always indicate the port of destination, e.g., "CFR Shanghai". As the risk of loss shifts from the seller to the buyer at the ship's rail in the port of loading, therefore this term cannot be used for airfreight or land transport and also is inappropriate for most containerized sea shipments - the term CPT is the appropriate one.

import export term - cost and freight - CFR

 

  Cost, Insurance and Freight - CIF

 
 

Cost, Insurance and Freight is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery, payment, when the risk of loss shifts from the seller to the buyer and who pays the costs of freight and insurance. The most commonly known trade terms are Incoterms, published by the International Chamber of Commerce (ICC, download full definitions here). These are often identical in form to domestic terms (such as the American Uniform Commercial Code), but have different meanings. As a result, parties to a contract must expressly indicate the governing law of their terms. It's important to realize that because this is a legal term, its exact definition is much more complicated and differs by country. Contact an international trade lawyer before using any trade term.

Cost, Insurance and Freight must also indicate the port of destination, e.g., CIF Shanghai.  When a price is quoted CIF by the supplier or manufacturer, it means that the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance. As mentioned earlier, CIF is an international commerce term (Incoterm).

CIF is identical in most particulars with Cost and Freight (CFR), and the same comments apply, including its applicability only to conventional maritime transport. Risk of loss of, or damage to, the goods is for the buyer, just as with CFR. However, in addition to the CFR responsibilities, the seller under CIF must obtain in transferable form a marine insurance policy to cover the buyer's risks of transit with insurers of repute. The policy must cover the CIF price plus ten percent and where possible be in the currency of the contract. Note that only very basic cover is required equivalent to the Institute "C" clauses, and buyers should normally insist on an "all-risk" type of policy such as that under the Institute "A" clauses. The seller's responsibility for the goods ends when the goods have been delivered on board the shipping vessel. In the guidelines for CIF published in Incoterms 2000 the term "carrier" does not appear and it clearly states "the seller must deliver the goods on board the vessel at the port of shipment" which makes CIF the incorrect term to use where the seller wishes their responsibility to end when they deliver the goods into the hands of a carrier prior to the goods passing the ship's rail at the port of loading. In the great majority of transactions the more correct term is CIP. This term is only appropriate for conventional maritime transport, not ro/ro or international container.

 
 
 
 
 

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