Also known as: Cost, Insurance and Freight
Under CIF the seller books and pays the ocean freight plus minimum insurance through to the port of discharge (POD). A price quoted "CIF X" is delivered at port X, freight and insurance included.
One point trips people up constantly: although the seller pays the freight, risk of loss or damage passes to the buyer at loading, exactly as under FOB.
CIF suits buyers who would rather have a port-to-port price than negotiate freight themselves.
FOB
FOB (Free On Board) is the Incoterm where the seller delivers the goods on board the vessel at the agreed port of loading. From that moment the buyer carries the cost and the risk of the sea leg.
Incoterms
Incoterms (International Commercial Terms) are the standard rules published by the International Chamber of Commerce that set out who bears each cost and risk in a cross-border sale: transport, insurance, customs and delivery.
POL and POD
POL (Port of Loading) is where the cargo goes on board; POD (Port of Discharge) is where it comes off. Together they define the sea route of the deal.