CIF vs DAP – who pays for what?
CIF is Cost, Insurance and Freight and DAP is Delivered at Place. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIF, the seller also covers insurance. Under DAP, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF applies only to sea and inland waterway transport. Under CIF, the main freight ends at the port of destination; under DAP, it ends at the agreed place, e.g. your warehouse.
- Insurance
- CIFSellerDAPNo obligation
- Risk passes
- CIFOn board the vessel at the port of loadingDAPAt the place of destination, before unloading
- Mode of transport
- CIFSea onlyDAPAny
Full cost breakdown
| Cost | CIF | DAP |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Seller | Seller |
| Main carriage (freight) | Seller | Seller |
| Insurance | Seller | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance. | At the place of destination, when the goods are ready for unloading from the arriving means of transport. |
| Mode of transport | Sea and inland waterway transport only | Any mode of transport (sea, rail, air, road) |
Notes
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
What to watch for when importing from China
CIF Cost, Insurance and Freight
CIF works like CFR, but the supplier also insures the goods – though only with minimum cover (Institute Cargo Clauses (C), 110% of the value of the goods), unless you agree on broader cover. The policy is usually issued by a Chinese insurer, so you would have to pursue any claim abroad. Check the scope of the policy or insure the goods in Poland.
More about CIF →DAP Delivered at Place
The supplier delivers the goods to the agreed address, but import clearance, duty and VAT are your responsibility. A “DAP Warsaw” price is therefore not the final price – add duty, VAT and the cost of customs clearance. State the exact address, because “DAP Poland” is not enough. Unloading is also your responsibility.
More about DAP →When to use CIF and when to use DAP?
- CIF – for sea freight, when the supplier arranges freight and insurance, and the policy’s minimum cover is enough for you – or you will arrange broader cover.
- DAP – when the supplier is to deliver the goods to your address, and you want to keep customs clearance in your own hands. With a new supplier, it is a safer alternative to DDP.
Has your supplier quoted a price including transport?
Compare it with our offer for transport from China – by rail, sea or air – with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between CIF and DAP?
Under CIF, the seller also covers insurance. Under DAP, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF applies only to sea and inland waterway transport. Under CIF, the main freight ends at the port of destination; under DAP, it ends at the agreed place, e.g. your warehouse.
Where does risk pass to the buyer under CIF?
At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance.
Where does risk pass to the buyer under DAP?
At the place of destination, when the goods are ready for unloading from the arriving means of transport.
Can CIF and DAP be used for rail freight from China?
Only DAP. DAP works with any mode of transport, while CIF applies only to sea and inland waterway transport. That is why CIF is not used for rail freight from China.
Compare other pairs
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.