Customers who want to import machinery, hand-held or mechanical equipment from China, for example, are offered prices: CIF and FOB???
Below we will explore three main aspects to better understand the differences when importing with CIF price & FOB price:
1. COST
BUY FOB:
NB transports goods to the port, carries out customs clearance procedures, pays LCC costs at the exporting country >Bear all responsibility and costs until the goods are loaded on the ship
NM will bear the sea freight + all costs & procedures to bring goods from the port to the warehouse
BUY CIF:
NB transports goods from China-VN port, NM only needs to pay the cost from port to warehouse
=> The difference here is WHO PAYS THE SHIPPING FREIGHT
2, RISKS
The responsibilities of FOB & CIF buyers are considered the same (eg: weather conditions, sea freight changes or shipwrecks cause damage and damage to goods, NM itself is responsible for handling and responsible for the loss). of goods
3. ACTIVITY
People who pay freight will have more initiative
BUY CIF: NB will look for FWDer to transport (to prioritize cost savings, choose many shipping companies at low prices, many train schedules depending on different prices (depending on service, itinerary, container), instead of going straight, you can transit through several Different ports for consolidating goods can lead to transit time, affect the quality of goods, and may incur repair costs; LCC fees of each shipping line are different, incur higher LCC costs or incur additional costs. DEM/DET (Deposit of containers, storage, storage)=> Do not proactively book charges, depend on NB
Another point is international payment: The person who books the freight clearly understands the FWDer unit, is proactive in information, schedules, payment support for all types of bills (original bill or surrended bill), issues with keeping goods or Detain goods when the two parties have some conflict.
In TH, buy CIF from NB, choose cheap price, long schedule, not good service, if there is a problem that needs to be resolved, you must contact the foreign FWDER company -> interruption, contact through many steps, information may be misleading when passing through many parties (especially LCL goods). As for FCL goods, pay attention to: Container repair issues, container cleaning, container damage and impact when lifting a lot.
BUY FOB: NM can control the situation, ship schedules as well as appropriate prices, the leading FWDer VN=e> party is actively selected
Each term will have its own advantages and disadvantages. People can consider depending on the actual shipment and supplier to make the most suitable choice. Personally, I would like to share a few ADVANTAGES when businesses Import term FOB:
1. Cost & initiative
If you buy CIF, you have to add one more step to check the price, choose a carrier and pay the carrier in advance => usually they will build up the shipping fee to handle these issues. When buying FOB, the NM has the right to book the freight, it will be easy to choose a good freight price with the optimal direct shipping time, with little transit; Select shipping company, shipping schedule (time, Dem-Dep, less container repair costs, thanks to FWDer for handling)
2. Optimize time & Flexibility
When booking freight, contact FDWer company in Vietnam for support and they work with the exporting country to track the shipment together. They have expertise in import and export, providing optimal services and logistics benefits. . When problems occur during transportation, FWDer will have reasonable, quick solutions.
If importing FOB, NM can choose a reputable and certified FWDER company with a professional team, updated information and clear processes. FWDer can support checking goods declaration name, quantity, volume, etc. to keep up with schedule and confirm goods delay status & NCC. When troubles appear, you can handle them and capture information more easily.
If in case the enterprise wants to import CIF: need to give the shipping plan to the NM, ask the NM to consign the goods to the FWDer side in Vietnam, track the schedule and grasp the shipment situation together.
**Here, businesses can see the advantages of CIF prices and FOB prices and hope to help people choose the appropriate form of import and export of goods. Besides the form of delivery, the sea freight forwarder also plays an important role. Therefore, individuals and businesses need to choose professional shipping units that support and provide complete shipping information.
