Incoterms 2010: What’s the difference between CIP and CIF Incoterms?

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.

Incoterms 2010 CIF and CIP may look similiar but are very different indeed
Incoterms 2010 CIF and CIP may look similiar but are very different indeed

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.

11 thoughts on “Incoterms 2010: What’s the difference between CIP and CIF Incoterms?”

    1. CIF and CIP are very similar but not identical. 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.

      Also, in CIF incoterms the seller pays until the ship is tied up in the destination port, and with CIP the seller pays until the destination point whether it is an airport, a train terminal, a port, your client’s home, a transporter..

  1. the difference between cif and cip ,cip you will handle the goods to the first carrier while cif you will handle the goods on board of the vessel.

  2. Where is the seller’s responsibility starts and ends if term is CIP Jakarta? Is it Jakarta port or consignee’s door in Jakarta?

    Thank you

    1. As per Incoterms CIP; Consignee’s door in Jakarta. But if sellers mentioned in Letter of credit our responsibility is still Port. Then answer is Jakarta Port.

  3. In CIP Seller delivers goods to the carrier at an agreed place, shifting risk to the buyer, but seller pays carriage and insurance to the named place of destination.> so its Jakarta port or any other agreed place in Jakarta, as it accomodates multi mode.

  4. Instead of CIF can go for CIP ,is there any aditional advantage to the buyer and what will be extra burden to seller

  5. I am still confused with the difference betweel Incoterm CIF and CIP.
    If I sell my goods CIP Muncie IN 47302. USA, does it mean that I have to put the goods at my customer’s site?

  6. According to Incoterms 2000, CIF stands for Cost, Insurance and Freight (… named port of destination), which means that the seller delivers when the goods to the port of shipment. CIP stands for Carriage and Insurance Paid To (… named place of destination), which means that the seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination.

    The major difference to the seller of transporting goods under CIF or CIP is that under CIF, the seller only needs to take out marine insurance against the buyer’s risk of loss of or damage to the goods during the sea or inland waterway journey. Under CIP, in addition to marine insurance, the seller also needs to take out cargo insurance to cover the risk of loss of or damage to the goods during transportation from the discharge port to the named destination.

    If you are a seller, check carefully if they are transporting goods under CIF or CIP terms in order to ascertain what insurance cover theey need. If you are a buyer, please check if your sellers have taken out insurance that covers your goods only to the port of shipment.

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