"How much to Dar?" is probably the most common question an export sales agent hears. The buyer wants one number. You have three ways to give it, FOB, CNF and CIF, and each means something different. Quote the wrong one, or quote the right one without saying what it covers, and the price that looked good in the chat turns into an argument when the proforma invoice arrives.
Where these terms come from
FOB, CFR and CIF are Incoterms: standard trade terms published by the International Chamber of Commerce, currently in their 2020 edition. They define who pays for what, and at which point the risk of loss or damage passes from seller to buyer. In vehicle exports you will see CFR written as C&F or CNF. They all mean the same thing.
FOB: the car, loaded on the ship
Free On Board means the seller delivers the car onto the vessel at the port of export, for example a port in Japan. The FOB price covers the vehicle and getting it on board. From that point, the ocean freight, insurance and everything that happens at the destination are the buyer's responsibility.
On most export listing sites, the headline price you see is effectively the FOB price: the price of the car itself. It is a useful number for comparing vehicles, but it is rarely what an overseas buyer will actually pay.
CNF (CFR): the car plus shipping to the buyer's port
Cost and Freight adds the ocean freight to a named destination port. "USD 16,260 CNF Dar es Salaam" means the seller pays to get the car on the ship and pays the freight to Dar es Salaam.
One detail surprises people: under CNF, the seller pays the freight, but the risk still passes to the buyer once the car is loaded at the port of export. If something happens at sea, it is the buyer's loss, which is why insurance matters.
For most buyers, CNF is the most useful quote because it answers the question they are really asking: what does it cost to get this car to my port?
CIF: CNF plus marine insurance
Cost, Insurance and Freight is CNF with insurance added: the seller also buys marine insurance for the voyage, in the buyer's favour. Under Incoterms 2020, the seller only has to provide minimum cover under CIF. If your buyer wants broader protection, they should ask what the policy actually covers rather than assume "insured" means "fully insured".
What none of them include
This is where most disputes come from. FOB, CNF and CIF all stop at the destination port. None of them include:
- port and terminal handling charges at the destination
- import duty, excise and taxes
- clearing agent fees
- transport from the port to the buyer's city
If your buyer thinks "CNF Dar es Salaam" means "delivered to my door in Arusha", they will be unpleasantly surprised. Say it clearly up front. Some listing sites offer extra options, such as customs clearance or delivery to an inland city, for an additional charge. That is a different product from a CNF price, and it should be quoted as such.
| FOB | CNF / CFR | CIF | |
|---|---|---|---|
| Vehicle price | ✓ | ✓ | ✓ |
| Loading at port of export | ✓ | ✓ | ✓ |
| Ocean freight to destination port | — | ✓ | ✓ |
| Marine insurance | — | — | ✓ (minimum cover) |
| Destination port charges, duty, clearing, inland delivery | — | — | — |
Why the same car shows different totals
Freight depends on the destination, so the total a listing site shows depends on where it thinks the buyer is. Many sites guess from the visitor's location, which is why a colleague in another country can see a different total for the same car. The shipping method matters as well: roll-on/roll-off (RoRo) and container shipping are priced differently.
Some destinations also require a pre-shipment inspection of used vehicles, and sites often add that fee to the total automatically when you choose those countries. That is legitimate, but it is another reason two quotes for the same car can differ.
How to quote without surprises
A good quote names the term, the port, and what is and isn't included. For example:
USD 16,260 CNF Dar es Salaam port, inspection included. Excludes insurance, port charges, duty and clearing.
It reads less exciting than a bare number, but it saves the conversation later. And whatever you quote in the chat, confirm the final figure on the proforma invoice (PI) before the buyer pays. Prices, freight rates and availability change, and the PI is the document the deal actually runs on.
Get these three terms straight and you will spend less time explaining invoices and more time closing. Buyers notice the agent who answers "what's included?" before they have to ask.