FOB vs CIF: Which Shipping Term Should You Choose?
A plain-language breakdown for first-time importers — who pays for what, when risk transfers, and how to pick the right term for your shipment.
The Short Version
FOB (Free on Board) means the seller's responsibility ends once the goods are loaded onto the ship at the origin port. You (the buyer) arrange and pay for the ocean freight and insurance from that point.
CIF (Cost, Insurance and Freight) means the seller arranges and pays for ocean freight and insurance to your destination port. You take over once the goods arrive.
Who Pays for What
- Under FOB: Seller pays export packing, inland transport to origin port, and export customs clearance. Buyer pays ocean freight, marine insurance, import duties, and destination port handling.
- Under CIF: Seller pays everything FOB covers, plus ocean freight and minimum marine insurance to your destination port. Buyer pays import duties and destination port handling/clearing.
When Does Risk Transfer?
This is the part people get wrong. Under both FOB and CIF, risk of loss or damage transfers to the buyer once goods are loaded onto the vessel at the origin port — not when they arrive. Under CIF, the seller pays for insurance during transit, but that insurance is arranged on the buyer's behalf and any claim is the buyer's to file.
Which Should You Choose?
| Situation | Recommended Term |
|---|---|
| You already have a freight forwarder and competitive freight rates | FOB |
| First-time importer, no existing freight forwarder relationship | CIF |
| Ordering a single engine or small LCL shipment | CIF (simpler, one invoice) |
| Ordering full containers (FCL) regularly | FOB (often cheaper at volume) |
Questions to Ask Your Supplier
- Is your quote FOB or CIF, and to which port specifically?
- If CIF, what is the insured value and what does the policy actually cover (total loss only, or partial damage too)?
- Who do I contact if the shipment is delayed or damaged in transit?
- What documents will I receive for customs clearance at the destination (bill of lading, packing list, commercial invoice, certificate of origin)?
How AsiaPower Handles This
AsiaPower offers both FOB and CIF shipping for engines, gearboxes, chassis parts, half-cuts and truck heads — to ports across Africa, the Americas, the Caribbean, the Middle East, Southeast Asia and Australia. We support full container (FCL) and shared container (LCL) shipments, and we'll recommend the term that makes sense for your order size and experience level.
Need a FOB or CIF Quote?
Send your product, brand/model and destination port — we'll reply with both options within 24 hours.