FOB Mundra means the supplier pays every cost until your container is loaded on board the vessel at Mundra, cleared for export. CIF Rotterdam means the supplier also pays sea freight and minimum insurance to Rotterdam. Under both, risk passes to you at Mundra, and every cost after the container lands in Europe is yours.
For the general difference between the terms, read FOB, CIF or DAP. This article lists who pays what on an agri cargo from a Gujarat port to a European port. The same split applies to Pipavav, Kandla or Nhava Sheva, and to Hamburg or Antwerp.
Supplier's costs under FOB Mundra
Origin terminal handling is a common point of dispute. Confirm in writing that it is included in the FOB price. Also confirm who pays for any extra tests or certificates your market needs, such as a health certificate, since these are often left out of a quote.
- The goods, cleaned, graded and packed to your specification.
- Bag marking and labelling agreed in the contract.
- Lab tests, fumigation or steam sterilisation, where the contract includes them.
- Container stuffing at the factory, and inland haulage to the port.
- Export customs clearance and the export documents, such as the commercial invoice, packing list, certificate of origin and a phytosanitary certificate where required.
- Terminal handling at Mundra and loading on board.
What CIF Rotterdam adds to the supplier's side
- Booking and paying for sea freight from Mundra to Rotterdam.
- Cargo insurance for the voyage. Under Incoterms 2020, CIF requires only minimum cover unless you agree a higher level.
- Issuing the bill of lading and the insurance certificate to you.
Your costs under both terms
Under FOB, you also book and pay the sea freight and arrange your own insurance. Under both terms, the following are yours:
- Terminal handling and carrier fees at Rotterdam, unless your freight contract includes them.
- The customs broker and import clearance.
- Import duty and VAT.
- Official checks at the border, such as document checks, physical checks and sampling for products under increased controls.
- Transport from the port to your warehouse.
- Demurrage and detention if the container is held, for example during a border check.
Points that catch agri buyers out
When you compare suppliers, put every quote on the same term and port. See how to compare quotes from Indian exporters.
- Risk passes at Mundra under CIF too. If the cargo is damaged at sea, you claim on the insurance, not from the supplier.
- Under CIF the supplier chooses the shipping line. It may pick a cheaper route with transhipment and a longer transit time.
- Destination charges vary by line and can be large. Ask your forwarder for an estimate before you compare a CIF quote with an FOB quote.
- Incoterms 2020 suggests FCA and CIP for containers, because the seller hands the container over at the terminal, before it is on board. FOB and CIF are still widely used in the agri trade. Whichever you use, agree exactly where costs and risk change hands.
- Write the term, the named port and "Incoterms 2020" into the contract.
How we help
We check what each quote includes, confirm origin charges in writing, and supervise loading at the factory before the container leaves for the port. Ask for a free sourcing review.