What is the difference between CNF and CIF? In CIF, the cost includes sea freight and insurance to deliver the items to the buyer's closest port. The buyer then has to take responsibility for the package from that point forward. CNF is similar to CIF, except insurance is not included.
The best incoterm to use for the door-to-door movement type is the DAP Incoterm or Delivered at Place. This obligates the seller to deliver the goods at the destination nominated by the buyer.
In short, it is the seller who must ensure the goods under CIF, while that responsibility lies with the buyer under CFR. Thus, in broad terms, CIF is generally the safer and more time-effective option for buyers, as it reduces insurance arrangement obligations.
Because the seller will build shipping into the price of the goods, these Incoterms might be difficult for buyers to accept as they take on the risk - and cost - but have no control over the shipment until the goods arrive in their country. The Incoterms more favorable to buyers are DAT, DAP, and DDP.
Under DDP shipping terms, a vendor has to pay for the transportation costs. In addition, the vendor usually holds all risks and responsibilities for the transportation of the goods until the buyer receives them. FCA shipping terms are usually paid for by the buyer since the carrier is nominated by the buyer.
CIF is only viable of sea and inland waterway shipments and requires the seller to deliver the insured cargo to the port of destination. Under CPT, the seller does not need to purchase insurance, and can deliver to any agreed point, and is not bound to shipping via boat.
DAP vs CIF
The difference between both Incoterms arises as the goods arrive at the port. Under CIF, the buyer is required to pay unloading fees at the import port. They are also required to load the goods onto the truck that is scheduled for the final destination. Under DAP, the seller handles these obligations.
Note that Incoterms are a registered trademark and are protected by copyright owned by the ICC. You can find further information on the ICC official website, in the [ICC Handbook on Transport and the Incoterms® 2020 Rules," or in the Incoterms® 2020 app.
Delivered duty paid (DDP) is a delivery agreement whereby the seller assumes all of the responsibility, risk, and costs associated with transporting goods until the buyer receives or transfers them at the destination port.
Delivery Duty Paid (DDP): Advantages and Disadvantages
This rule was originally published in Incoterms® 1967 and has continued largely unchanged in its intent. The seller must deliver the goods as in DAP, but this time all import clearance formalities are at the cost and risk of the seller.
