23/06/2025
Navigating FOB and CIF Pricing in International Trade
FOB (Free on Board): The seller covers costs until goods are loaded onto the vessel at the port of shipment, including production, local transport, export customs, and port charges.
The buyer takes responsibility from there.
CIF (Cost, Insurance, and Freight): Extends FOB to include ocean freight and insurance to the destination port, with the seller arranging and paying for both.
FOB Pricing: Covers costs until goods are loaded onto the
vessel.
* Formula: FOB Price = Cost of Goods + Local Transport +
Export Customs + Port Charges
Example:
Cost of Goods: $10,000
Local Transport: $500
Customs Clearance: $200
Port Charges: $300
FOB Price: $11,000
CIF Pricing: Extends FOB to include ocean freight and
insurance.
Formula: CIF Price = FOB Price + Freight + Insurance
Example:
FOB Price: $11,000
Ocean Freight: $2,000
Insurance: $100
CIF Price: $13,100
Why It Matters:
Cost Control: Clear pricing for better budgeting.
Negotiation Power: Know Your Costs to Strike Better Deals.
Risk Clarity: Understand responsibilities at each stage.
Profit Boost: Optimize pricing strategies for higher margins.
Master FOB and CIF for smarter, smoother global trade.
Explore efficient logistics with MILAGS. Get a customized solution here: https://milags.odoo.com/r/dMq
