Question: What Is Difference Between CIP And CIF?

What is CIP and VIP?

CIP stands for “Commerical Important Person” who is a general manager of a company or an important business man .

VIP or CIP service is provided at the airports, hotels and seminar halls with a little difference which is the immunization of VIP service ..

Can CIF be used for air freight?

CIF cannot be used for air freight. CIF is only designated for ocean freight and waterway shipments. Buyers and sellers wishing to use CIF for air shipments can substitute CIF for CIP, which stands for carriage insurance paid to the destination.

When should I use CIF?

Importers generally buy CIF if they are new in international trade or they have very small cargo. It is a more convenient way of shipping since they don’t have to deal with freight or other shipping details, but you must realize that you are probably paying a lot more to get the goods than you should.

How is CIF value calculated?

In order to find CIF value, the freight and insurance cost are to be added. 20% of FOB value is taken as freight. … The total amount of CIF value works out to USD 1313.00. If any local agency commission involved, the same also is added on CIF value of goods – say 2% on FOB – USD 20.00.

Do Incoterms apply to air freight?

INCO Terms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities, and clarify when the ownership of the merchandise takes place. Used for any mode of transportation. …

What is the main difference between CPT and CIP?

As per Inco terms, CPT means Carriage Paid to (named destination mentioned). CIP means, carriage and insurance paid (up to the destination mentioned).

Does CIF price include duty?

Does CIF include duty? CIF includes duty and charges, where the seller assumes responsibility for export customs proceeding and the buyer for import customs.

What does CIF Singapore means?

Cost, Insurance and FreightThe Cost, Insurance and Freight (CIF) incoterms means the seller (exporter) is responsible for delivering the goods onto the vessel of transport and clearing customs at the country of export.

What is the meaning of CIP Incoterms?

Named Place RequirementNamed Place Requirement: Place of Destination In Carriage and Insurance Paid To (CIP), the seller assumes all risk until the goods are delivered to the first carrier at the place of shipment—not the place of destination. Once the goods are delivered to the first carrier, the buyer is responsible for all risks.

Is CFR and CIF same?

Cost and freight (CFR) and cost, insurance, and freight (CIF) are terms used in international trade for the shipping of goods by sea. … CIF is similar to CFR, except it also requires the seller to take out an agreed amount of marine insurance to protect against the loss, damage, or destruction of the order.

Does CIF include unloading?

If CIF is the customs valuation basis, the costs of unloading the vessel, clearing customs, and delivery to the buyer’s premises in the country of destination—including inland insurance—must be deducted to arrive at the CIF value.

Does FOB apply to air freight?

FOB is not suitable for LCL or air freight, because there is a middle step for load consolidation. The named place of delivery is the consolidation facility, not the ship or plane. Consequently, the buyer will be liable and responsible for the remaining transportation and terminal charges.

Which is better CIP or CIF?

In CIP, the risk of goods passes from the seller to the buyer at the destination port, whereas in CIF the risk is transferred to the buyer — once the goods are loaded by the seller on the vessel port.

What does CIF mean?

Cost, insurance, and freightCost, insurance, and freight (CIF) is an expense paid by a seller to cover the costs, insurance, and freight of a buyer’s order while it is in transit. The goods are exported to a port named in the sales contract.

How are CIF charges calculated?

CIF (Cost, Insurance, Freight) value is the total value of “Invoice value + Insurance + Freight + Ex-work charges (If any)”.

What is the equivalent of CIF for air freight?

CIF (Cost Insurance and Freight) CIF is the same as CFR but the seller must also insure the goods until they arrive at the named port of discharge. The risk is still transferred to the buyer as soon as they are loaded onto the vessel.

What is CIP value?

Carriage and Insurance Paid To (CIP) is when a seller pays freight and insurance to deliver goods to a seller-appointed party at an agreed-upon location. … Under CIP, the seller is obligated to insure goods in transit for 110% of the contract value.

Who pays for CPT shipping?

In a CPT transaction, the seller must clear the goods for export and deliver them to a carrier or appointed person at a mutually agreed-upon (between the seller and buyer) destination. Also, the seller pays the freight charges to transport the goods to the specified destination.