Definition of Cost, insurance, freight (CIF)

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TeachMeFinance.com - explain Cost, insurance, freight (CIF)



Cost, insurance, freight (CIF)

The term 'Cost, insurance, freight (CIF)' as it applies to the area of energy can be defined as ' A type of sale in which the buyer of the product agrees to pay a unit price that includes the f.o.b. value of the product at the point of origin plus all costs of insurance and transportation. This type of transaction differs from a 'delivered' purchase in that the buyer accepts the quantity as determined at the loading port (as certified by the Bill of Loading and Quality Report) rather than pay on the basis of the quantity and quality ascertained at the unloading port. It is similar to the terms of an f.o.b. sale except that the seller, as a service for which he is compensated, arranges for transportation and insurance'.

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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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