We’ve already seen the components of the FOB price in the article FOB prices for Areca palm leaf plates. This article will walk you through the various line items that is a part of CIF price for areca palm plates in international trade.
CIF price is the most used incoterm in international trade next to FOB. Here we will walk you through various components of the CIF price.
This price component includes the cost of goods, inland transport, and other charges associated with on-boarding on to the vessel.
Insurance covers all the risks that arise during sea transit. The premium for this marine insurance is %0.05 of the CIF price. And in the event of a claim(if goods lost or damaged), you can get up to 90% of the total transaction value.
Normal practice is to insure the shipment for 110% of the total commercial value so that you can claim 99% of the total cost.
The freight charge is the cost involved in transporting the Areca palm leaf plates from the origin port to the destination port. The shipping line charges freight on the volume basis.
Apart from sea freight, there are few other charges from shipping line but varies applicable only in cerain situation.
The risk passes once the seller puts the cargo on to the vessel. Seller is also responsible for insuring the shipment and delivering it at the destination port.
Rathi co-founded CrozBorder Exports in the year 2017 and deals with manufacturing, consolidating and supplying eco-friendly products(Areca plates) to global customers.