Source by: Redwood Logistics
What Does CIF Mean?
Cost, insurance, and freight (CIF) is an international shipping agreement, the seller’s responsibility is to cover the costs, insurance, and freight of a buyer’s order while the cargo is in transit. Cost, insurance, and freight only apply to goods transported via a waterway, sea, or ocean.
CIF price = product price + shipping cost to Port of China + customs declaration fees + sea freight + insurance
Who Bears the Risk in CIF Shipping?
Source by: Trade Risk Guaranty
Let’s say you’re shipping goods from China to the United States. The CIF Ningbo shipping method means the seller will pay for all maritime freight and insurance costs to get the products to the Ningbo port.
You, as the buyer, are responsible for receiving the shipment there, handling import customs clearance, and paying any duties or taxes. Once the goods are cleared through customs, you’ll need to transport them from the port to your own warehouse.
As far as who bears the risk of damage or loss during shipping, since the seller is arranging transportation, they will be held accountable for any issues that arise until the goods arrive in the destination port of the USA.
So, for example, if merchandise is damaged during transit, the seller will help facilitate communication with freight forwarders and work to resolve any problems. Additionally, the seller will help purchase cargo insurance and provide you with relevant policies. That way, in case of loss, you can file a claim with the insurance company.
CIF Freight and Insurance Charges
Source by: Capterra
When your goods are shipped LCL under the CIF term, you might encounter a situation where the Chinese forwarder charges you a very low sea freight initially.
You might think that’s all and that you won’t need to pay them anything else later. However, when you go to pick up the goods at the port, the forwarder charges you again.
In this case, you could feel cheated because it doesn’t match what you were expecting. But in reality, it’s not a scam – it’s just because these freight forwarders calculate LCL shipping costs differently.
Source by: Quick-Cargo-Service
For example, say you’re transporting 3 CBM of goods. You ask 3 different forwarders for prices and they all give you something different. What they’re actually doing is charging you for part of the total shipping cost upfront – maybe 30%, 10%, or even 0%.
It varies from one forwarder to another. Then, when you pick up the goods at the port in your country, they charge you for the rest of the cost. All of these fees together add up to the total shipping cost that you should be paying to the forwarders.
It’s important to remember that just because a freight forwarder offers a low price doesn’t mean that the overall cost will be cheap.
In order to insure your purchase, the seller is required to buy insurance for the goods which will be (1+10%) of the CIF price. So, the insurance paid will amount to CIF price x 110% x 0.0008.
Shipping Process
Source by: Adnavem
Here are a few things to keep in mind:
- Get a customs broker to help you with customs clearance.
- Send the consignee and notify party information to us.
- We will book the vessel to the destination port.
- If the dinosaur costume is shipped to the USA, 48 hours ahead of vessel departure, we will send you the ISF document. Then you or your customs broker need to get it filed no later than 24 hours prior to the departure of the vessel. Otherwise, there might be $5,000 per violation.
- After the vessel departs, all customs clearance documents will be sent, such as a bill of lading, commercial invoice, and packing list.
- Usually, one week ahead of arrival, the local shipping company will contact you. And you will need to provide the customs clearance documents to them and pay for the import duty.
Finally, the cargo will be released. And you can arrange inland transportation.
FAQs
Source by: PCB Freight Management
What Should I Pay Except for The Sea Shipping Cost?
Service fee for hiring a customs broker, local cost, and customs duty.
What Should I Do on Import?
Ensure that the dinosaur costume is imported in the name of the company.
Only a broker can deal with the import process, please hire a customs broker to handle this import work.
After the cargo is released, please pick up the dinosaur costume at the warehouse.
Above is how to ship a dinosaur costume via CIF. If you want to learn more about another shipping method (DDU/DDP), check out this article.
