Among the Incoterms (International Commercial Terms) that we encounter in international trade, the term CIF (Including Cost, Insurance and Freight) also plays a prominent role in the export process of basalt products. It is very critical to understand this term in order for basalt flooring, covering, steps, cube stone, disabled ramp and sink products to find a place in the international market.
- Cost of Goods: Under CIF, the seller finances the entire production process of basalt products. This process covers all steps, starting from the extraction of basalt to cutting, shaping, quality control and preparation for shipment. The seller covers all costs that may arise in this process, so the buyer is only expected to receive the product at the designated port of destination.
- Insurance: It is a must for the seller to insure against any risk of damage, accident or loss during the process of basalt products from the factory to the port of destination. However, this insurance is usually basic and does not cover possible additional risks. If the buyer wants his basalt products to be protected by more comprehensive insurance, he must obtain additional insurance at his own initiative.
- Freight: Freight, which is the international transportation cost of basalt products, is the responsibility of the seller within the scope of CIF. This includes all the logistics costs of the products from the factory to the loading port to the designated port of destination.
- Transfer of Risk: One of the most critical aspects of CIF is determining when risk is transferred. Once the basalt products are loaded onto the ship at the loading port, all risks officially pass to the buyer. However, this does not mean that the buyer assumes financial obligations. For example, if basalt products are damaged or lost during loading or transportation, this risk belongs to the buyer; but the seller continues to cover insurance and freight costs to the port of destination.
As a result, the term CIF clearly defines the distribution of costs, risks and responsibilities between buyer and seller in international trade of basalt products. However, in such complex transactions, it is essential for both parties to carefully examine the contract details, evaluate whether they are comfortable with all aspects of the agreement, and take precautions against possible risks. This is a critical step to avoid unexpected costs or problems in international trade of basalt products.
Special Situations in the Export of Basalt Products for CIF (Including Cost, Insurance and Freight) Delivery
When the term CIF is introduced in the international trade of basalt products, it is possible to encounter some special situations due to the special properties and application areas of this natural stone. These special situations can directly affect both the seller and the buyer and require a conscious approach for business success.
- Product Features and Packaging: The fact that basalt is a natural material causes each product to have unique properties. Therefore, additional protections may need to be provided during the packaging process. For CIF delivery, the cost of packaging is the seller’s responsibility, so special packaging or protection requirements may directly increase the cost.
- Long Transport Times: Basalt products may take longer to transport to some markets. This requires careful consideration of the coverage and duration of the insurance policy. Additionally, storage conditions and transportation methods need to be reviewed to avoid any decrease in the quality of the product during this period.
- Local Regulations: In the markets where basalt products enter, it should be checked whether they comply with local standards and regulations. In CIF delivery, the seller is responsible for complying with all regulations up to the port of loading of the product, but at the port of destination the buyer may be required to comply with local regulations.
- Variable Freight Costs: Freight costs around the world may vary. It should be noted that costs may fluctuate depending on seasons, routes and carrying capacity, especially when transporting heavy loads such as basalt. The seller must determine the CIF price taking this variability into account.
- Insurance Coverage: The fact that basalt is a special product may cause some insurance companies to offer special policies for such products. Beyond the basic insurance offered under CIF, the seller may also offer additional comprehensive insurance in line with the buyer’s wishes.
- Transfer of Risk and Damage Situations: Basalt products may be damaged during transportation. If a damage occurs, although the buyer assumes the risk, the seller’s obligation to cover insurance and freight costs continues. This requires that communication between the two parties be uninterrupted and that any problems are resolved quickly.
In conclusion, although the CIF delivery term offers many advantages in the international trade of basalt products, it is essential to consider special circumstances and potential difficulties when using this term. The key to commercial success is for both the seller and the buyer to be careful and conscious throughout the process.
