FOB and CIF are among the best-known Incoterms in maritime trade. Contrary to a common idea, however, FOB is not always better than CIF, and CIF is not always less advantageous than FOB. The choice depends on the contract, the mode of transport, the cargo and the importer's ability to manage freight.
The rules are those of Incoterms® 2020 of the International Chamber of Commerce. For the full table, see Incoterms: table of responsibilities and the Incoterms guide for Cameroon.
How does FOB work?
Under FOB — Free On Board, the seller fulfils the delivery obligations provided for by the rule when the goods are loaded on board the vessel at the agreed port. The buyer organises in particular the main carriage.
How does CIF work?
Under CIF — Cost, Insurance and Freight, the seller organises and pays in particular freight to the destination port and provides the insurance required by the rule.
Caution: paying freight to destination does not mean that the seller bears the risk through to destination.
Potential advantages of FOB
For a structured importer:
- choice of service provider;
- freight negotiation;
- better visibility on certain conditions;
- greater control of the transport chain.
That control can help you re-read demurrage free time: free time depends on the booking and the conditions negotiated with the carrier, not on a slogan such as « FOB = more days
».Potential advantages of C
F For a first-time importe
- : less freight organisation at origi
- ; an international cost that is simpler to obtain from the supplie
- ; a supplier counterpart for a larger share of the transpor
. CIF is not prohibited for Cameroonian imports. It can cost more through lack of control (line, B/L, insurance) — or not, if the FOB quote plus local freight is poor. Only a file-by-file comparison decide
s.FOB and CIF are not always best for containe
s For containerised cargo handed to the carrier before loading on board, FCA may better match the real operational pattern. Likewise, CIP can be relevant when seller-paid insurance and carriage are wanted in a multimodal chai
. Choosing FOB « because it is maritime » when the actual handover takes place at the terminal is fitting a rule to a gesture that is not the one in the contr
act.How to cho
se? Ask the supplier for several scenarios when they are available: FCA price, FOB price and CIF price. Then ask your logistics partner to estimate freight, insurance, destination charges and local haulage. You can then compare the real total c
st. Also include CIF value (do not double-count freight and insurance if the invoice is already CIF) and, where relevant, an LCL consolidation scenario. A licensed customs broker reviews these scenarios before the order is sig
ned.Frequently asked questions (
FAQ)Is FOB always better than CIF for importing into Camer
on? No. FOB is not always better than CIF, and CIF is not always less advantageous. The choice depends on the contract, the mode of transport, the cargo and the importer's ability to manage frei
ght.Does the CIF seller bear the risk through to Dou
la? No. Paying freight to destination does not mean the seller bears the risk through to destination. Re-read the Incoterms® 2020 rule that applies to the contr
act.Are FOB and CIF always the best Incoterms for a contai
er? Not necessarily. For containerised cargo handed to the carrier before loading on board, FCA may better match the actual pattern. CIP can be relevant if the seller pays carriage and insurance in a multimodal ch
ain.How do you compare FOB and CIF in pract
ce? Ask the supplier for several scenarios (FCA, FOB, CIF) when they are available. Then have freight, insurance, destination charges and local haulage estimated, and compare the real total c
st. Never choose an Incoterm because an article claims it is « always better ». Compare cost + risk + control + insurance + transport + operational capacity. For imports to Douala or Kribi, ALC Transit can compare several scenarios before you sign your