FOB, CIF, CFR: Incoterms Explained for Dairy Buyers

Incoterms decide who arranges and pays for what in an international shipment, and exactly where risk passes from seller to buyer. For dairy imports, three terms cover most deals.

FOB — Free On Board

The seller delivers the goods, cleared for export, onto the vessel at the origin port. From that point, freight, insurance and risk are the buyer's. FOB gives the buyer control over shipping and is popular with importers who have their own freight arrangements.

CFR — Cost and Freight

The seller pays for freight to the destination port, but risk still passes to the buyer once the goods are on board at origin. Insurance is the buyer's responsibility.

CIF — Cost, Insurance and Freight

Like CFR, but the seller also arranges a minimum level of marine insurance to the destination port. CIF is convenient for buyers who prefer the seller to handle freight and basic cover.

Which should you choose?

• Want maximum control and have your own forwarder? FOB.
• Want the seller to handle freight but arrange your own insurance? CFR.
• Prefer freight and basic insurance bundled? CIF.

For dairy specifically, also confirm whether the shipment is reefer (butter, cream, frozen paneer) or ambient (AMF), as this affects freight cost and planning.

Foodondoor quotes dairy exports on FOB, CIF or CFR terms to suit how you prefer to buy. Tell us your destination port and preferred term for an indicative price.