The concise distinction
Under FOB, the buyer arranges the main carriage and the seller delivers on board at the named shipment port. Under CIF, the seller arranges carriage and insurance to the named destination, while risk still transfers when the goods are on board at shipment.
Keep the rule within its transport scope
Both rules are for sea and inland waterway transport. A truck collection or tank-to-tank transfer needs terms that fit the actual movement. Adding “FOB” to a procedure does not resolve a mismatch between the named rule and physical delivery.
What changes in commercial preparation
A FOB buyer needs a workable vessel nomination and freight plan. A CIF buyer needs to review the seller’s carriage and insurance arrangements alongside receiving readiness. In both cases the terminal, inspector and relevant operating parties need a consistent schedule.
What the sale contract still needs
Express provisions should cover title, payment, quality acceptance, quantity determination, claims, delay allocation and dispute resolution. Parties should not assume these are settled merely by inserting a three-letter delivery term.
Compare total terms, not just quoted price
Ask each offer to identify the included services and excluded charges. Use a commercial comparison that places freight, inspection, terminal costs and timing on the same basis. Any unresolved exposure should be allocated explicitly before signing.
Choose a workable structure
Read the FOB procedure and CIF procedure, then review logistics responsibilities with the actual operators. A delivery rule is useful when it accurately describes the movement the parties can perform.
Sources & further reading
Technical references support the definitions above. Consult the applicable standard and qualified advisers for transaction-specific decisions.
