Logistics · 5 min read
FOB, CFR or CIF? How Your Incoterm Decides Who Buys the Port-to-Port Freight
Three letters on the invoice decide who books the vessel — and who gets to shop for the best rate.
Quick answer
Under FOB the buyer books and pays the port-to-port freight from the loading port. Under CFR the seller pays freight to the destination port, and under CIF the seller pays freight and insurance. Whoever controls the freight can shop for the best price, so sellers with good freight rates often quote CFR or CIF, and buyers with their own forwarder prefer FOB.
What does each term cover?
- FOB Kochi — seller delivers on board at Kochi; buyer pays sea freight and insurance
- CFR Jebel Ali — seller pays sea freight to Jebel Ali; buyer insures
- CIF Jebel Ali — seller pays sea freight and insurance to Jebel Ali
Where does risk pass?
In all three terms, risk passes to the buyer once the goods are loaded on the vessel at the origin port, even when the seller is paying the freight.
Which term gives the best price?
Ask for the goods priced both ways. If the seller's CFR price minus their FOB price is less than the buyer's own freight quote, CFR is the better deal; if not, buy FOB and book the freight yourself.
Frequently asked questions
Can Versa Logistics quote freight for either party?
Yes. We quote port-to-port freight for exporters selling CFR or CIF and for importers buying FOB.
