CIP and CFR under Inco terms

CFR and CIP – Any difference in delivery terms as per Inco terms

CFR delivery rules are designed by ICC under Incoterms 2020 for the movement of goods by Sea and Inland Waterways, as it is called Marin restricted Inco term.  However CIP delivery term may be used for all modes of transport (Air, Sea or Land). 

So the main carriage under CFR movement of goods is by sea.  So CIP is not used for movement of goods by sea and inland waterways.

CIP is widely used to move goods from Warehouse to Warehouse, movement of LCL cargo, shipments under break bulk etc. especially to Dry ports and intermediary ports. CPT modes are used widely used for the shipments by air also.     CFR delivery rules are widely used for the movement of goods by sea with destination to a port in buyer’s side. 

Under CFR, the seller transfers risks on movement of goods to buyer immediately upon goods are gone onboard the vessel or barge.   Under CIP terms, the delivery takes place when goods are handed over to the carrier contracted by seller, where the risks are transferred from seller to buyer.

The seller arranges minimum covered Insurance under CIP terms of delivery where in CFR terms of delivery, neither the party is responsible as per the Incoterms 2020 rules thereby either seller or buyer arranges insurance as per their mutual agreement under contract of carriage separately.

Two web posts related to CIF and CIP explaining   both terms in detail in simple language  are available below to read.  You may click below to know easily to understand  both term CIP and CIF:

CIF  Cost Insurance and Freight

CIP  Carriage and Insurance Paid To

Would you like to add more information on the difference between CIP and CIF?  Share below your comments  on CIF Vs. CIP.

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