FOB vs CIF: Which Shipping Term is Right for You?

Understanding Incoterms for Herb Import

Choosing the right Incoterm affects your costs, risks, and logistics responsibilities. Here's a practical comparison of the two most common terms used in herb trading.

FOB (Free On Board)

What it means: The seller delivers goods onto the vessel at the port of shipment (typically Alexandria, Egypt). Risk transfers to the buyer once goods are on board.

Buyer responsibilities: Ocean freight, insurance, destination port charges, customs clearance, inland transport.

Best for: Experienced importers with established freight forwarders, large volume buyers who can negotiate better freight rates.

CIF (Cost, Insurance, Freight)

What it means: The seller arranges and pays for freight and insurance to the destination port. Risk still transfers at the port of shipment.

Buyer responsibilities: Destination port charges, customs clearance, inland transport.

Best for: New importers, smaller orders, buyers who prefer a simpler logistics arrangement.

Cost Comparison

FOB prices are lower, but you need to add freight and insurance costs. CIF prices are higher but include these costs. For a 20ft container from Alexandria to Hamburg, the difference is typically $1,500-2,500.

Our Recommendation

Start with CIF for your first orders to simplify logistics. As your volume grows and you establish freight relationships, switching to FOB can save 5-15% on shipping costs.