DAY 7 : INCOTERM :CIP- Carriage and Insurance Paid To

Welcome to Day 7 of INCOTERM series!

Today, let's dive into CIP (Carriage and Insurance Paid To)!

CIP (Carriage and Insurance Paid To):

CIP is an INCOTERM that requires the seller to arrange and pay for transportation and insurance to the named place of destination.

The seller is responsible for clearing the goods for export, but the buyer is responsible for clearing the goods for import.

Example:

Let's say AgroFeed, an agro company in the USA, agrees to import 500 tons of animal hay from EuroHay, a supplier in Europe.

They agree to use the CIP INCOTERM.

EuroHay is responsible for arranging and paying for transportation and insurance to the Port of New York, USA. They must clear the goods for export from Europe.

However, AgroFeed is responsible for clearing the goods for import into the USA.

Cut-off Dates:

To ensure smooth customs clearance and delivery, it's essential to adhere to the following cut-off dates:

·?????? Customs Cut-off: 24 hours prior to vessel departure

·?????? Shipping Cut-off: 48 hours prior to vessel departure

·?????? Documentation Cut-off: 72 hours prior to vessel departure

Key Points:

- Seller (EuroHay) is responsible for arranging and paying for transportation and insurance to the named place of destination.

- Buyer (AgroFeed) is responsible for clearing the goods for import.

- Adhering to cut-off dates is crucial for smooth customs clearance and delivery.

CIP vs CIF

What’s the difference between CIP and CIF?

The two incoterms are very similar, except that CIP is used for all modes of transport, whereas CIF applies to sea freight only.

This also means that for CIF, responsibility transfers at the origin seaport, whereas for CIP it transfers at any agreed-upon location in the origin country.

CIP is also very similar to CPT, except that with CIP, the seller is also responsible for arranging main carriage insurance.

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