Freight Dispatching Terminology Practice Test

CIF is used for ocean shipments and means the seller pays the costs, freight, and marine insurance to bring the goods to the destination port. The seller must arrange and pay for transportation to the port of destination and procure insurance for the shipment, while the risk shifts from seller to buyer when the goods are loaded onto the vessel. This combination—covering cost, insurance, and freight—is what CIF stands for. You’ll see why this fits best here: it explicitly names the three areas the seller handles (cost, insurance, and freight), unlike other terms where responsibilities are split differently. For example, one term focuses on delivering once goods are on board with the buyer arranging insurance, another term minimizes the seller’s obligations, and another places more duties on the buyer to handle import steps. CIF’s clear package of cost, insurance, and freight up to the destination port is what makes it the correct choice.