Transportation Operations LINCS Practice Exam

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Which statement does NOT apply when using cost, insurance, freight terms?

Seller clears goods for export
Seller pays for transportation costs after goods reach destination
Seller pays charges, including freight, until goods reach destination point
Seller buys insurance

The correct answer is: Seller pays for transportation costs after goods reach destination

The statement that does not apply when using cost, insurance, freight (CIF) terms is that the seller pays for transportation costs after the goods reach the destination. Under CIF terms, the seller is responsible for covering all costs associated with getting the goods to the buyer's designated location, which includes transportation fees incurred up until delivery. This means that the seller is obligated to handle transportation charges upfront, rather than after the goods have arrived. In CIF transactions, the seller also takes on the responsibility of securing insurance for the goods during transit, making sure they are protected against potential loss or damage. This reflects a key aspect of CIF, where the seller's responsibilities are extended to ensuring both the delivery and safety of the goods until they reach the buyer's destination. Overall, understanding CIF terms helps clarify the obligations of the seller and the buyer during shipping and the physical transfer of goods, emphasizing the seller's role in managing costs and liabilities related to the transportation process up to the point of delivery.