Transportation Operations LINCS Practice Exam

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What does CIF stand for in shipping terms?

Cost, Inspection, Freight
Cost, Insurance, Freight
Carriage, Insurance, Freight
Carriage, Inspection, Freight

The correct answer is: Cost, Insurance, Freight

CIF stands for Cost, Insurance, and Freight. This term is commonly used in international shipping and trade. It indicates that the seller is responsible for covering the costs associated with transporting goods to a specified port, including the cost of the goods, insurance coverage for the goods during transit, and the freight charges incurred for shipping. Essentially, it outlines the responsibilities and costs that the seller must bear before the goods reach the buyer’s designated port. By using CIF, both parties have a clear understanding of the division of costs and responsibilities, which helps facilitate smoother transactions in international trade. This terminology is particularly important in contracts, as it ensures that the seller not only ships the goods but also secures insurance, protecting the interests of both the buyer and the seller during transit.