Depending on the viewpoint of the parties concerned, cargo, also known as goods or merchandise, can be considered as both a liability and a possession. Until it is delivered to the buyer, the seller views the cargo as a liability; whereas, the buyer views the cargo as property from the moment payment is made until it is received. The Benefits of Cargo Insurance
In order to protect both the seller and the buyer from financial loss in the event that the products are damaged or lost during shipping, cargo insurance is a crucial component of international trade. The benefit of cargo insurance is that it offers monetary security for the value of the transported cargo. Damages brought on by accidents, theft, natural catastrophes, and other unanticipated events may be covered by the insurance. Additionally, it lessens the possibility of a dispute arising between the customer and the seller over lost or damaged products.
FOB Prices
Free on Board, or FOB, is a trading word that designates the boundary between the seller’s and the buyer’s responsibilities for the products. The price of the products, loading fees, and any additional expenses incurred to transport the items to the port of shipment are all included in FOB prices. The customer is responsible for the goods, including any risk of loss or damage during transit, once they are loaded onto the shipping vessel.
The cost of the products, the cost of loading, and the cost of transportation to the port of shipment are added together to get the FOB price. The costs of getting the goods to the port of shipping are the seller’s responsibility; the costs of transporting the items from the port of destination to their final location are the buyer’s responsibility. CIF Price:
Cost, Insurance, and Freight, or CIF, is a commerce phrase that refers to the price of the goods, the price of the insurance, and the price of the freight to the port of destination. The cost of the products, the insurance, and the freight, as well as the expense of loading and unloading the items at the port of destination, are all the seller’s responsibility. As soon as the products are carried to their final destination after being unloaded at the port of destination, the buyer is responsible for them.
According to the viewpoints of the people involved, cargo might be viewed as either a liability or a piece of property. In order to protect both the seller and the buyer from financial loss in the event that the products are damaged or lost during shipping, cargo insurance is a crucial component of international trade. In international trade, the phrases FOB and CIF denote the obligations of the buyer and the seller. While CIF costs comprise the price of the products, the cost of insurance, and the freight cost to the port of destination, FOB prices only include the price of the goods and any costs paid in getting them to the port of shipping.