FOB or CIF? The wrong choice does not change the tea — it changes who controls the freight, the insurance and the risk during the 30+ days your container is at sea.
What Each Term Actually Includes (Incoterms 2020)
- FOB (Free On Board, e.g. FOB Ningbo): the seller delivers the goods on board the vessel you booked. You pay and control the ocean freight and insurance from that point.
- CIF (Cost, Insurance & Freight, e.g. CIF Dakar): the seller pays ocean freight and minimum insurance to the named port. Risk still transfers on board — but the seller manages the carriage.
Practical Differences for Tea Buyers
| FOB | CIF | |
|---|---|---|
| Freight control | Your forwarder, your carrier | Seller’s forwarder |
| Landed-cost visibility | You assemble it | One invoice, freight included |
| LC simplicity | More documents on your side | Cleaner single-file presentation |
| Best for | Experienced importers with local forwarders | First orders, LC buyers, new corridors |
Common Mistakes
- Comparing FOB and CIF prices directly without subtracting your own freight cost.
- Assuming CIF includes destination charges — it does not (they are buyer’s at destination).
- Buying CIF with an insurance minimum — for high-value specialty lots, ask for 110% CIF value +10% coverage or insure yourself under FOB.
Our Recommendation
First container with a new supplier: CIF — fewer moving parts while you qualify the supplier. From the second container onward, many importers switch to FOB and consolidate freight with their own forwarder for cost control. Either way, demand the same document set — see the documentation list.
Smileaf Tea quotes FOB Ningbo / Shanghai / Xiamen and CIF to major ports worldwide — get both prices for your destination →