![]() Another trade term related to CFRs and CIFs is FOB or Free On Board. ![]() In contrast, CFR terms of contract refer to sellers having to pay for the goods cost and freight only. If the goods are under CIF contract, it simply means that the insurance and freight cost are already added up to the actual cost of goods for shipment. When goods are purchased and to be transported on ships, it is important for purchasers to know if the shipment is under CIF terms. But the CIF terms rather indicate that goods complied with the standards in terms of delivery and insurance. And as with many other shipments, CIF terms clearly indicate that it is a contract that does not actually guarantee that the shipped goods would arrive at their point of destination. CIF or Cost, Insurance, Freight is usually applied to shipments on land and on water.
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