FOB / CIF Price

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Ravi Kumar Rajgaria

Ravi Kumar Rajgaria (Querist)
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23 September 2008 Please explain that What does the meaning of FOB Price / CIF Price etc?

Ravikumar.G

Ravikumar.G (Expert)
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23 September 2008 F.O.B. (FREE ON BOARD) is a transportation term that indicates that the price for goods
includes delivery at the seller’s expense to a specified point and no further. The FOB term is
used with an identified physical location to determine 1) the responsibility and basis for
payment of freight charges, and 2) the point a twhich title for the shipment passes from seller
to buyer.The FOB location terms, Origin and Destination, may be qualified by modifiers. The
modifier determines the payment of the transportation charges. Modifiers denote nothing
about the title of the goods or filing of claims. The most three common modifiers are: Collect,
Prepaid & Add, and Prepaid & Allow. Collect: The carrier collects the transportation chargesfrom the buyer. Prepaid & Add: The seller prepays the transportation charges, but adds the
charges to the invoice for reimbursement from the buyer .Prepaid & Allow: The seller prepays
the transportation charges and they are already included in the contract price.

Ravikumar.G

Ravikumar.G (Expert)
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23 September 2008 CIF (COST, INSURANCE AND FREIGHT) is a shipment where all shipping costs are paid by
the exporter, including insurance.