The CIF dilemma: Will you get fooled by CIF?
The temptation to have your partial transport (Less than Container-load, or loose cubic meters) shipped to Europe on the basis of Cost Insurance Freight (CIF) is almost unbearable. After all: it is the simplest way. You do not have to negotiate the ocean freight rates with a Freight Forwarder; it is a matter of waiting for the boat to arrive at the port. It's almost too good to be true. And so it is.
The Commercial Invoice you receive from your supplier indicates the incoterm CIF. This means that the supplier has arranged the transport up to and including the arrival in the port of Rotterdam. The costs are usually nicely stated on the invoice; and indeed: the costs are not too high.
After a few weeks you will receive a neat message from an European company that is responsible for the further handling as soon as your container is unloaded in Rotterdam. You will also receive a neat overview of the costs they will charge you for unpacking your goods from the (partial) container, the administrative costs and the further transport costs to your delivery address. Customs clearance is also no problem. You authorise the company to carry out Customs clearance for you: One counter, one contact person; convenience serves the human being.
The invoice you receive makes you realize that convenience does have a price. How is it possible that the costs here in Europe are so much higher than the costs that your supplier charged you while these costs also include the sea freight costs up to Rotterdam? You have been fooled with CIF.
What is going on? You have been fooled by not using FOB as incoterm. By booking Free on Board via a Dutch or German Freight Forwarder you would have been much cheaper. Your supplier has indeed seduced you with low rates. In his own country he booked the freight Freight Prepaid with the Freight Forwarder who paid him the highest price. He charges you costs for the transport, but instead of paying purchase costs to the Dutch or German Freight Forwarder he even receives a bonus from him.
Three guesses who paid the bonus