FOB vs CIF: What’s the Difference and Which Is Best for Your Imports?

FOB is used for sea or inland-waterway transport with delivery on board the buyer-nominated vessel at the named port of shipment. The seller handles export clearance where applicable, and cargo risk transfers when the goods are on board.

Key features of FOB:

• The buyer arranges the main carriage from the named shipment port.
• The seller delivers on board and handles the export formalities required under the rule.
• Cargo insurance is a separate buying decision under FOB.

Under CIF, the seller arranges and pays for carriage and the required cargo insurance to the named destination port. Cargo risk transfers when the goods are on board at the shipment port.

Key features of CIF:

• Identify both the shipment port and the destination port covered by the quotation.
• The buyer handles applicable import formalities; compare destination handling and inland delivery charges separately.
• Request the insurance policy or certificate and check the covered risks and claim instructions.

While both terms deal with seaborne trade and port-to-port transit, the specifics of cost, risk, and control separate FOB and CIF. Here are the main contrasts in plain language:


Compare the actual freight quotation, insurance policy and destination charges for the shipment.

For a coffee order from Vietnam to Australia, agree the shipment port, destination and delivery point in the quotation. Under FOB the buyer arranges the main carriage; under CIF the seller contracts for it. In both rules, the on-board delivery point determines cargo risk.

For a CIF order, request the insurance document and the procedure for making a claim directly to the insurer. Confirm how the coffee lot and shipping documents identify the covered cargo.

See the existing Vietnam-to-Australia coffee import guide for the destination’s separate import checks.

Review the insurance and comparable quotation before approving the terms:

• Insurance cover: Under the default CIF requirement, the seller obtains Institute Cargo Clauses (C) cover or similar and an insured amount of at least 110% of the contract price. Minimum cover concerns which risks are insured.
• Costs: Compare ocean freight, insurance, destination handling and the inland leg on the same basis.

Check policy exclusions and any additional cover needed for the coffee and route.

Choose the term from the actual delivery arrangements:

• Handover: FOB and CIF fit delivery on board a vessel; identify the named shipment port and delivery point.
• Container terminal: When coffee is handed to a carrier at a terminal before vessel loading, consider FCA.
• Carriage: For seller-arranged multimodal carriage, consider CPT or CIP.
• Insurance: Agree the cover needed for the actual cargo and route, and compare the policy with the quotation.

The Australia food-import guide covers separate destination checks.

Write the chosen rule, named port or place and Incoterms® 2020 version in the sales contract. State payment and transfer-of-ownership terms there as well; the Incoterm allocates delivery, risk and specified costs.

Use the official ICC overview for the rules and the Australian Border Force import guide for destination formalities.

Agree the delivery point, transport arrangements, insurance and shipment documents before approving the quotation. Check that the offered Incoterm matches the handover of the actual goods.

For MR.VIET coffee or packaged-food enquiries, discuss your product format and destination market with the wholesale team.