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

by admin on June 10, 2011

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.


{ 8 comments… read them below or add one }

RAJAGOPAL January 9, 2012 at 7:04 am

IF CIF IS COST INSU N FREIGHT IS PAID BY THE SELLER,
IN CIP IS ALSO THE SAME PL CONFIRM

Reply

admin January 27, 2012 at 8:57 am

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..

Reply

mohamed February 2, 2012 at 9:19 pm

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.

Reply

GILBERT TALION March 1, 2012 at 6:58 am

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

Reply

Lwando March 29, 2012 at 1:40 pm

Multimodal – the buyer specifies delivery point. It can be anywhere the buyer pleases.

Reply

Raaj March 24, 2012 at 7:12 pm

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.

Reply

Gandhimohan April 4, 2012 at 6:53 am

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

Reply

Lena May 23, 2012 at 3:41 pm

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?

Reply

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