Under CIF terms – who is responsible to off-load cargo from the ship – seller or buyer..??

Trudi asked below question about CIF Terms and who is responsible to off-load cargo from the ship – seller or buyer..??

I have a CIF shipment to Dar es Salaam. The port cranes in Dar es Salaam can not handle the tonnage of the item we are sending. Who is responsible to hire and pay a portable crane to off load the cargo in Dar es Salaam – the buyer or the seller.

Trudi – Incoterms® 2010 defines CIF as below :

CIF – Cost, Insurance, and FreightCIF “Cost, Insurance and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered.

The risk of loss of or damage to the goods passes when the goods are on board the vessel.

The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

‘The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.

The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover.

Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”

The cargo becomes the buyer’s property from the moment the cargo passes over the ships rail at the port of shipment is loaded on board the ship.. Since it is his cargo, the BUYER is obligated to do what is required to off-load his cargo..

The BUYER is responsible to hire and pay for all costs associated with off-loading the cargo at Dar es Salaam.. From an insurance and risk perspective, it is always prudent to clearly show the actual place of insured destination in the sales contract, commercial invoice, L/C and any other relevant documents..

What did you think of the above article..?? Comment below..

18 comments on “Under CIF terms – who is responsible to off-load cargo from the ship – seller or buyer..??

  1. Zuzana Haider says:

    Hello,
    Do I understand it right, that when incoterms are CIF Durban, that the cargo is insured only up to the port in Durban (on vessel), but the unloading and the delivery to the consignee is not insured?
    Thank you!

  2. kailash kulchandra says:

    SIR, WE ARE BUYING HAZ CARGO , SHIPPER INSISTS ON FOB WITH TERMS WHEREAS WE ARE ASKING HIM TO MAKE IT CFR . WITH WHOM THE RESPONSIBILITY OF THE CARGO LAY IN CASE THE GOODS ARE DAMAGED ON REACHING DESTINATION PORT??

  3. Trudi says:

    Thank you again All for the comments – it has been most helpful. I have learned a lot.
    Have a awesome day.

  4. Christel says:

    great comments, and helpfull, even for an employee in this business!
    where were you, no, correction, why haven’t I found you earlier?
    Kind regards!

  5. Clive says:

    Hi Trudi
    Expensive it is (most unfortunately)
    Suggest you negotiate further / look for alternatives although there are limited BB opportunities to DAR
    Best wishes

  6. Trudi says:

    Hi Clive
    The cargo is not loaded yet – the cargo is still in the manufacturing process but it is my responsibility to get it in Dar. The quote I have is for vessels with its own cranes and it is very expensive. This is causing the seller to fork out high freight rates for something that is not really their problem.

    1. When a company quotes, particularly on CIF as in this case, a company should have all their figures available to include them in the selling price, as ultimately it is the buyer who is paying. Is the seller having to charter a ship to get the cargo to destination? If not, all the seller has to do is load the cargo onto the ship where his risk ends but his responsibility will be to ensure the cargo gets to the port of destination, pay for the ocean freight to get it there plus the insurance based on a value of CIF plus 10% on conditions ICC “C”. The buyer can request better terms of insurance as the cost will be for his account as all charges will be built into the final selling cost and invoiced to the buyer.

  7. Clive says:

    Hi Trudi
    Just curious
    Was your cargo loaded by Ships Crane or Mobile Crane or Floating Crane and
    at which berth Point / Maydon Wharf ?

  8. Alex, the liner terms of which you speak are in respect of charter parties, and not normal break bulk cargo. Have a look at my previous comment as well as that of David D Murray. David is a very well versed person in the Incoterms ® rules and comments often in the http://www.linkedin.com website on Incoterms rules and their interpretation. Please also note that the Incoterms ® rules has nothing to do with ownership, but everything about risk in the cargo.

  9. Clive says:

    Fully agree to comments but most importantly to what Alex says. WHAT are the terms of shipment FLT / FIOS / FILO / LIFO ??? How did cargo get loaded onto vessel if it cannot be discharged . Perhaps it is here that we should look for answers.
    This is what makes it the most interesting and educational shipping blog
    Thanks again

    1. Trudi says:

      Morning All – the cargo is loaded in Durban and Durban port cranes can handle the tonnage but Dar es Salaam’s cranes cant – the port cranes in Dar can handle up to 35 tons and my cargo is 83 tons. Dar does have protable cranes but it needs to be hired in – that is where the questions comes in who is responsible for the off loading.
      Thank you all for your comments, it is really helpfull.

  10. Trudi says:

    Thank you – this is an awesome site – extremely helpful

  11. Whenever looking at the Incoterms rules, it is of vital importance to consider whether it is the 2000 or 2010 version. With the 2000 version, risk passes when the cargo passes the ship’s rail, with the 2010 rules, risk passes when the cargo is stowed and secured on board the ship. Incoterms has nothing to do with ownership. Ownership passes when the item is paid for. Whether it is the 2000 or 2010 rules, it is always the duty of the buyer under Incoterms ® 2010 rules CIF to pay for the discharge of the cargo. The seller has the cost and responsibility of getting the cargo to the named port, still loaded.

  12. The concept of “the ship’s rail” was eliminated from the Incoterms® rules. The Guidance note to Incoterms® rule CIF says, “”Cost, Insurance and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.” It says nothing about a “ship’s rail” and if you read the entire Incoterms 2010, you will find there is no mention of the “ship’s rail”.

  13. Alex says:

    Hariesh: it is required to examine the liner term agreed between the seller and the shipping company as to make sure who is responsible for cargo handling. In many cases, the buyer cannot handle the cargo whatsoever.

    1. femi ilori says:

      Neither will the seller handle the offloading., The shipping line will be responsible for loading a cargo on board with the facility to offload at the port of destination.The buyer and the seller have to rise and partner togetther for shipping line to offload. moreover its not their vessel. and the terms of shipment must be interpreted.

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