FOB vs CIF: Which Incoterm Should You Choose?

A clear comparison of FOB and CIF, including who pays freight, insurance and customs.

FOB vs CIF: Which Incoterm Should You Choose?

FOB and CIF are two of the most common ocean freight Incoterms, but they divide costs and responsibilities differently. Choosing the wrong term can lead to unexpected freight, insurance or customs costs.

FOB: buyer controls the main freight

The seller handles export customs and loading; the buyer pays ocean freight, insurance and destination clearance. FOB suits importers with logistics experience.

CIF: seller pays freight and insurance

The seller pays ocean freight and minimum insurance, but risk still transfers at loading. The buyer remains responsible for destination clearance and delivery.

How to choose

  • Want control of freight cost and carrier: choose FOB
  • Prefer the supplier to arrange delivery to port: choose CIF
  • Need door-to-door and customs: consider DDP/DDU
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