What is CIF and FOB price?
Meaning: FOB means free on board. The price includes all the expenses incurred until goods are actually loaded on board the ship at port of shipment. CIF stands for cost, insurance and freight. The seller meets cost of goods, freight and marine insurance. So, the seller prefers FOB price.
Is CIF more expensive than FOB?
It is advised to go with the FOB option for shipping as the buyer gets control over the shipping process and the costs are comparatively cheaper. Whereas in CIF shipping, since the seller has the authority over shipping charges and arranging a ship with the help of a freight forwarder, the cost is higher.
How is CIF price calculated from FOB?
In order to find CIF value, the freight and insurance cost are to be added. 20% of FOB value is taken as freight. Means USD 200.00. Insurance is calculated as 1.125% – USD 13.00 (rounded off).
Does CIF include FOB?
The abbreviation CIF stands for “cost, insurance and freight,” and FOB means “free on board.” These are terms are used in international trade in relation to shipping, where goods have to be delivered from one destination to another through maritime shipping. The terms are also used for inland and air shipments.
What is CIF price formula?
The following CIF price calculation is based on the following formula: CIF Price Formula. CIF= MPN + ( MPE + MPE x R ) + MO + ENV + EMB + FI + SI + CER + GA + GFB + OG – DWx (1 -IG) + FIn + S.
How do you calculate CIF value?
(CIF is an Incoterm that means Cost, Insurance, and Freight.)…Figure the shipment’s CIF value, by adding the amounts.
- (C) Cost (Invoice Value) $10,000.
- (I) Insurance $1,000.
- (F) Freight (Shipping) $2,500.
- = $13,500 (CIF Value)
How do you calculate FOB price?
FOB means Free On Board. [FOB Value = Ex-Factory Price + Other Costs] If terms of delivery of a transaction are on FOB, then the cost of movement of goods on board the vessel is borne by the seller, all other expenses to deliver the goods has to be borne by the buyer.
What are CIF terms?
Cost, insurance, and freight (CIF) is an international shipping term that describes the seller’s responsibility for the cost of shipping, freight charges, and insuring the cargo being shipped via ocean or waterway.
How do you find the CIF value?
Assessable value = Cost + Insurance + Freight+ Handling charges. to calculate the AV, You need to calculate the CIF value. As per Circular 39/2017-Customs, The CIF value and Assessable value are the same. To find CIF value, the freight and insurance costs are to be added. 20% of the FOB value is taken as freight.