Glossary
What is CIF (Cost Insurance Freight)?
CIF is an Incoterm where the seller pays for ocean freight and the minimum marine insurance (110% of CIF value) to the destination port. The buyer handles customs clearance, duty, and last-mile delivery from there.
When to use CIF
CIF works best for:
- First-time importers without forwarder relationships
- Mid-sized shipments ($2K-10K)
- Buyers who want one quote covering ocean leg
CIF gotchas
- Seller marks up freight 10-25% (their kickback from the forwarder)
- Insurance is only 110% of CIF value — buy your own marine cargo policy if shipment is > $10K
- "CIF Hamburg" doesn't include destination charges (THC, CFS, drayage) — those still hit you
CIF price example
Quote: CIF Long Beach $4.55/unit, MOQ 5,000 units
What you actually pay:
- Goods + freight + min insurance: 5,000 × $4.55 = $22,750
- Destination THC + CFS + ISF: ~$580
- Customs duty: $1,138 (5%)
- Drayage: ~$500
- Total landed: ~$24,968 → $4.99/unit
vs FOB equivalent at $4.20: total ~$23,400 → $4.68/unit. The CIF convenience cost you ~$0.31/unit (~6.6%).
When to switch to FOB
Once you have one good shipment under your belt and a forwarder you trust, switch to FOB on subsequent orders.
Full comparison
See [FOB vs CIF vs DDP](/blog/fob-vs-cif-vs-ddp-which-incoterm-protects-new-importers/).
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