When quoting an international buyer, understanding the difference between FOB (Free On Board) and CIF (Cost, Insurance and Freight) is important.
FOB pricing generally covers the goods and the seller’s obligations up to the agreed point of shipment, while CIF pricing includes the cost of the goods, insurance and freight to the destination port.
Use the FOB vs CIF Calculator below to estimate the difference and understand how freight and insurance affect your export price.
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FOB and CIF are Incoterms used in international trade to define responsibilities, costs and risk between the seller and buyer.
Under FOB, the seller generally handles the costs and responsibilities required to deliver the goods on board the vessel at the agreed port of shipment.
Under CIF, the seller generally arranges and pays for the cost of the goods, insurance and freight to the named destination port.
The exact responsibilities and transfer of risk depend on the applicable Incoterm and contract terms. Always confirm the agreed Incoterm and named place or port in your sales contract.
A simplified calculation is:
CIF Price = FOB Value + Freight + Insurance
The actual calculation can depend on the transaction, insurance method, freight quotation and contract terms.
An exporter may receive a buyer enquiry asking for either an FOB or CIF quotation.
Comparing both can help you understand:
This is particularly useful when freight rates change significantly between destinations.
Before sending a quotation, exporters should also confirm the correct Incoterm, named place or port, currency, payment terms and other commercial conditions with the buyer.
The calculator provides an estimate for comparison and planning. Always use the actual freight and insurance quotations applicable to your shipment when preparing a final commercial quotation.
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Calculated your FOB or CIF price? The next step is finding the right international buyer.
With Volza, you can research actual import-export shipment data to discover potential buyers, suppliers, products and markets.
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