Incoterms

Although there are 13 terms listed in the ‘INCOTERMS’ there are three which we come across regularly in chartering as follows: FOB (Free On Board) – one of the most commonly used terms, FOB means the shipper/seller will arrange and pay for the merchandise to be moved to the loading port and put on board the vessel and delivery is accomplished at this point. CFR (Cost and Freight) – previously known as C&F, CFR defines the separate responsibilities – one dealing with the cost of the goods ‘C’ and the other, ‘F’, referring to the freight charges to an agreed discharge port; delivery is accomplished at the discharge port. CIF (Cost, Insurance and Freight) – this is similar to CFR except that the shipper/seller will insure the goods for loss as damage and delivery is accomplished at the discharge port.