Export is suitable for fob

CIF: the abbreviation of "Cost Insurance and Freight", which means "cost plus insurance and freight" in Chinese. When using this term, the seller is responsible for chartering a ship and booking a space under normal conditions and paying the freight to the port of destination, loading the goods on board within the port of shipment and the shipping period specified in the contract, and is responsible for handling the cargo transportation insurance and paying the insurance premium.

FOB: the abbreviation of Free on Board or Freight on Board, which means "delivery on board the ship at the port of shipment (specified port of shipment)" in Chinese. When using this term, the seller shall be responsible for handling the export customs clearance procedures, delivering the goods to the ship designated by the buyer at the port of shipment and within the specified period specified in the contract, assuming all risks before the goods cross the ship's rail at the port of shipment, and notifying the buyer in a timely manner.

The two trade terms refer to different ports, different cost structures, different insurance premium payment and handling, different chartering and booking, different time to notify the buyer of shipping notice, and different risk of force majeure.

1. The two trade terms refer to different ports: the port after FOB refers to the port of the seller's country, while the port after CIF refers to the port of the buyer's country.

2. Different cost structures: FOB refers to the cost price, also known as the free on board price. It is the ex-factory price of the goods + all the costs incurred by the export declaration goods to be loaded into the buyer's designated ship's cabin + their own profits. CIF is based on the FOB price plus the ocean freight and insurance premium.

3. The payment and handling of insurance premiums are different: FOB insurance is handled by the buyer, and the seller should notify the buyer before loading; CIF insurance is handled by the seller and the insurance premium is paid. The seller handles insurance according to the contract terms and insurance terms and hands the insurance policy to the buyer.

4. Chartering and booking are different: FOB prices are arranged by the shipping company/shipping agent or even the freight forwarding company designated by the buyer. Whether the buyer can charter and book a space in time will affect the seller's timely delivery and bank delivery of documents, etc. CIF prices are determined by the seller's independent choice of shipping company or freight forwarding company.

5. The time of informing the buyer of the shipping notice is different: FOB stipulates that the shipping notice should be notified to the buyer before loading, and the content and details of the loading should be provided so that the buyer has sufficient time to handle the marine insurance of the goods. CIF is insured by the seller and the shipping notice can be notified to the buyer within a few days after loading.

6. Different risk of force majeure: In CIF terms, the seller handles the insurance and insures at the port of departure. In the case of customer refusal to pay and return the order, the seller can claim compensation from the local insurance company with the insurance policy. In the case of FOB, the buyer handles the insurance, the insurance policy is in the hands of the buyer, and the insurance company is mostly abroad, so it is difficult for the seller to claim compensation from the insurance company. In FOB trade terms, it is even more difficult for the seller to find the shipping company/shipping agent designated by the buyer for chartering and booking a space to obtain evidence in a timely and accurate manner.