What each term actually covers
CIF puts the ocean freight and the marine insurance on the seller up to the named discharge port. CFR is the same without the insurance. FOB stops the seller's obligation once the container is loaded on board at origin — the buyer then owns freight, insurance and everything that follows.
For frozen cargo, the important difference is not only who pays. It is who is positioned to react when a reefer unit alarms in transit or a vessel is rolled. A seller who booked the freight can escalate with the carrier; a buyer on FOB has to do that alone, from the other end of the route.
- CIF — seller pays freight and insurance to the named port
- CFR — seller pays freight, buyer insures
- FOB — buyer takes over from loading at origin
- CPT / CIP — used when delivery continues past the port
When CIF is the right default
For most first shipments, and for any buyer who prices its resale from a landed cost, CIF is the cleaner instrument: one figure, one counterparty, one insurance policy that covers a cold-chain failure at sea. It is why our quotes default to CIF at the discharge port — CIF Abidjan, CIF Tema, CIF Haiphong.
When FOB or CFR pays off
An importer with a freight contract and consistent monthly volume can often beat a seller's freight rate, and FOB or CFR then translates directly into margin. The trade-off is operational: the buyer books the reefer, monitors the temperature record, and carries the demurrage and plug costs if the container waits at the port.
A practical middle path is to start on CIF while the relationship and the specification stabilise, then move to CFR or FOB once volumes justify managing the freight in-house.
Cold-chain clauses worth writing down
Whatever the Incoterm, agree the set-point (-18 °C for frozen protein and fries), the temperature-recorder requirement, the tolerance on carton weights, and the inspection point. These four lines prevent the majority of disputes on a reefer container, and they cost nothing to include in the contract.