FOB, CIF and DDP represent different cost and liability boundaries and cannot be compared to the total amount quoted. FOB is usually arranged by the buyer for the main sea transport to facilitate the use of its own cargo; CIF is arranged by the seller for maritime transport and insurance at the designated port of destination, but customs clearance and local costs at the port of destination are usually borne by the buyer; and DDP is broader in scope but requires confirmation that the seller can legally handle imports, taxes and fees and final delivery. Specific liability should be based on the Incoterms version of the order and the contract.
The comparison begins with the establishment of the same end point, such as full conversion to the port of destination or buyer's warehouse. The FOB offer plus the buyer ' s sea, insurance, destination port, customs duties and trailers; the CIF offer plus unincorporated port and customs clearance and inland transportation; and the DDP check for customs duties, import duties, waiting fees, unloading charges and surcharges in remote areas. Any vague “package freight” would need to be split.
Shipment and export delivery at an engineering plastics plant (based material for the plastics network)
Maritime transport prices are valid and subject to route conditions. The procurement party shall confirm the port of embarkation, the port of destination, the type of container, the expected gross weight, the direct or transit route, the free-box period and the seasonal surcharge. The minimum maritime transport of the CIF does not necessarily entail the minimum destination port costs, and it would be preferable for the buyer to have its freight forwarder review it. In the case of heavy cargo, it is also necessary to confirm whether additional costs are incurred by road-limits and trailers.
Risks are also different from control. When the FOB is used, the buyer has the booking and transport nodes, but has to assume more coordination; CIF reduces the front-end operation by requiring clear information on the scope of insurance coverage and claims; DDP appears to be simple, but may lead to delays in clearance if import subjects or tax arrangements are unclear. Procurement teams should be selected in the light of import experience and local legislation.
The request for quotations requires the supplier to indicate, respectively, the terms of the trade, the location, the type of cabinet, the cost element, the exclusion and the validity of the quotation. Using standard cost tables, CIFs are compared and budgets are set aside for maritime fluctuations. Trade clauses determine the successful arrival of orders only as a tool for the allocation of responsibilities, with clear cost lists and compliance with import arrangements.
Need for further evaluation of the actual project?
Applications, sizes, quantities, site photographs or drawings and delivery destinations are sent, on which we can identify more suitable products and processing programmes.
