Cost, Insurance and Freight
Seller pays freight and minimum insurance (ICC C). The classic sea trade term - but risk still transfers at origin.
When goods pass ship's rail at port of shipment
Seller provides MINIMUM (ICC C) - covers total loss only, NOT partial damage or theft. Buyer should consider ICC A (all-risks) coverage.
Organic shea butter for cosmetics industry
Small/medium exporters benefit from handling logistics end-to-end. European buyers often prefer CIF for simplicity - one price covers everything to destination.
FOB Abidjan if buyer has better freight rates
White sesame seeds in bulk
Ethiopian exporters on the Djibouti–Asia route often have competitive freight arrangements. Chinese buyers accept CIF for Letters of Credit financing.
FOB Djibouti if Chinese buyer controls shipping
Natural rubber bales
Liberian rubber exporters include freight and insurance for a complete delivered cost. Simplifies pricing for Southeast Asian processors.
FOB Monrovia for experienced rubber traders
Popular for Letters of Credit transactions where banks require CIF pricing. Used by medium-to-large African exporters who want to offer a comprehensive price. Common for agricultural commodities (shea butter, sesame, cocoa butter) going to European and Asian markets.
The Mistake: Buyer assumes CIF insurance covers all risks including partial damage, theft, and mishandling.
The Problem: CIF only requires ICC Clause C - which covers total loss events (sinking, fire, stranding). Theft, breakage, and water damage may NOT be covered.
The Solution: Buyers should request ICC A (all-risks) coverage in the contract, or purchase additional insurance. Consider using CIP which mandates ICC A.
The Mistake: Using CIF for a shipment that involves road + sea + road segments.
The Problem: CIF is a sea-only term. It references 'on board vessel' and port-to-port delivery.
The Solution: Use CIP (Carriage and Insurance Paid To) for multimodal transport. CIP provides ICC A all-risks insurance and works for any transport mode.
