In this article we will talk about the difference between CIP and CIF Incoterms 2010, given the confusion they may generate. With this article any doubt you may have will be cleared, and you will be able to discuss the difference between both perfectly, as well as the reasons you would use either CIF or CIP Incoterms.
The majority of enterprises and people linked with International Commerce know the CIF Incoterms (Cost of Insurance and Freight) perfectly.
However, when you ask about CPT (Carriage Paid To) most won’t know the difference. In fact they could be the same physically, but not conceptually.
CIF are maritime Incoterms, whereas CIP Incoterms are multimodal Incoterms.
This implies that CIP may be used with any transport (maritime, fluvial, road, air train and the combination thereof as in multimodal transport.) This takes us to the heart of the question.
When we utilize CIF Incoterms we may only agree upon a delivery place if it is a destination port.
That is to say that, for the seller, CIF means to leave the merchandise within the depot of the ship, which is tied up in the destination port. This is the only possible situation because CIF Incoterms are only for maritime use. However, CIP Incoterms have much more flexibility since, besides for being usable with any type of transport mode and combination thereof, you may agree upon any point of your destination country for delivery, whether it is an airport, a train terminal, a port, your client’s home, a transporter, etc.
Case of use:
Note that at some point there may be a CIF Barcelona, or CIF ship – Barcelona port coincidence.
For multimodal Incoterms we ought to define the delivery site with higher precision, since the mode is variable.