FOB vs CIF for paper bag importers

FOB: Free On Board

Under FOB Incoterms® 2020, the seller delivers the goods aboard the vessel at the agreed shipment port and handles export clearance. Risk normally transfers to the buyer when the goods are on board. The buyer arranges the main sea transport; FOB does not require either party to buy cargo insurance.

CIF: Cost, Insurance and Freight

Under CIF Incoterms® 2020, the seller arranges and pays for sea freight and the required cargo insurance to the named destination port. Risk still normally transfers when the goods are loaded aboard the vessel at the shipment port, not when they arrive at the destination.

The insurance requirement under CIF is minimum cover unless broader cover is agreed. Check the policy, covered risks and claims arrangements. See the ICC explanation of CIF and CIP for the underlying distinction between transport costs and risk.

Questions to resolve before accepting a quote

• Place and rule: Which port or place is named, and which Incoterms® version applies?
• Freight: Who books the transport, and which journey does the quoted price cover?
• Insurance: Who arranges it, what does it cover, and what should happen if goods are damaged?
• Arrival costs: What is included for unloading, terminal handling, clearance and onward delivery?
• Order details: Are the bag specification, quantity, carton count, dimensions and weights agreed?

Ask for a written breakdown of included and excluded costs. Your own freight forwarder or customs broker can use that scope to estimate the remaining charges for your receiving location. Compare quotations using the same bag specification and shipment details.

Container shipments may call for another rule

FOB and CIF are sea and inland-waterway rules. When a container is handed to a carrier before vessel loading, discuss whether FCA or CIP better matches the actual handover. The ICC guide to FCA and FOB explains why this delivery point matters.

Request a clearly scoped export quotation

Send Signature Kraft the bag style, width × gusset × height, paper and printing requirements, quantity, destination and required arrival date. Include your preferred shipping arrangement and forwarder details if known. Sample and production timing are confirmed in the quotation.

Use our destination enquiry guides for the USA, UK or UAE, and learn about Signature Kraft. For an Indian delivery address, see the India order guide.