In-depth analysis of the application skills of CIP trade conditions, comprehensive understanding of the rights and responsibilities of buyers and sellers, from insurance coverage to cost calculation, helping you easily avoid trade traps and reduce international trade risks.
In modern international trade, CIP (Carriage and Insurance Paid To) is a crucial trade term. It stands for ""freight insurance premium payable to"" and is one of the most commonly used terms in international trade terms formulated by the International Chamber of Commerce. Under CIP terms, the seller needs to bear the freight and insurance costs of transporting the goods to the designated destination, which includes all costs before the goods are delivered to the first carrier.
The most notable feature of the CIP clause is its flexibility - it applies to any mode of transportation, whether it is sea, air, land or multimodal transport. This universal applicability makes it popular in cross-border e-commerce and international trade.
- Provide goods that comply with the contract
- Pack them properly to ensure safe transportation
- Prepare commercial invoices and other necessary documents
- Sign a transportation contract with the carrier
- Pay the cost of the main transportation section
- Responsible for export customs clearance procedures
- Purchase cargo insurance that meets the minimum requirements
- Provide insurance documents or certificates
- Ensure that the buyer can claim directly from the insurance company
- Pay the price as agreed in the contract
- Bear import duties and other taxes
- Responsible for customs clearance at the destination
- Receive the goods at the designated location
- Arrange for subsequent transportation (if necessary)
- Bear the risk after delivery of the goods
The insurance coverage required by CIP must at least meet the level of Institute Cargo Clauses (C), with additional war risk and strike insurance. The insurance amount should be the CIP price of the goods plus 10%, which is 110% protection.
| Insurance type | Coverage | Minimum requirements |
| Basic insurance | General risks | ICC(C) |
| Additional insurance | War, strike | Must contain |
| Insured amount required | CIP price +10% | Mandatory |
| CIP (Carriage and Insurance Paid to) | CIF (Cost, Insurance and Freight) | |
| Scope of application | All modes of transportation (sea, air, land) | Sea and inland waterway transportation only |
| Risk transfer point | When delivered to first carrier | When the cargo crosses the ship's side |
| Insurance Requirements | ICC (A) or (B) level, war risk and strike risk must be included | Basic ICC (C) level is sufficient |
| Applicable scenarios | Cross-border e-commerce, high-value goods, multimodal transport | Bulk commodities, traditional maritime trade |
| Flexibility | High (convertible shipping method) | Low (sea shipping only) |
| Common goods | Precision instruments, electronic products, time-sensitive goods | Raw materials, bulk commodities, general goods |
Choosing CIP or CIF mainly depends on your trade needs. CIP is suitable for operators who need flexible transportation methods, transport high-value goods or operate cross-border e-commerce because it provides comprehensive insurance protection and multimodal transportation options; while CIF is most suitable for pure ocean trade, bulk commodity transportation and traditional import and export trade, especially for transactions that are more cost-sensitive. Regardless of which trade terms you choose, it is recommended that important details such as delivery location and insurance coverage be clearly agreed in the contract. Want to learn more about international trade expertise? Welcome to visit Fuuffy Information and Blog to get first-hand logistics information!
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