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FOB / CIF Price Calculator

Enter goods value, sea freight and insurance rate to get FOB, CFR and CIF prices at once. Insurance uses the shipping convention of 110% of CIF value, and any term can be converted into the other two - computed entirely in your browser.

When a buyer asks for a CIF price, the real question behind it is who pays the freight and who pays the insurance: quote FOB and your responsibility stops at the port of loading, quote CIF and you carry both the sea freight and the insurance. Get one of the three terms wrong and you either absorb the cost or lose the order.

The part most exporters get wrong is insurance. Under the shipping convention it is charged as 1.1 x CIF value x rate, so it cannot be derived from the FOB price by simple multiplication. This tool applies that convention in both directions: enter whichever term you have and read the other two.

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How to use

  1. Pick which price you already have: FOB (free on board), CFR (freight included) or CIF (freight and insurance included).
  2. Enter the goods value, the total sea freight and the insurance rate; 0.3% is a common starting point.
  3. Read the three prices, plus how much of the difference is freight and how much is insurance.
  4. For commission, convert separately using the agreed basis rather than multiplying the net price.

How it works

How FOB, CFR and CIF differ

FOB means the seller delivers the goods on board at the port of loading; sea freight and insurance are the buyer's. CFR adds the sea freight to FOB, and CIF adds insurance as well, making it the most convenient price for the buyer. The order is always FOB <= CFR <= CIF, and the gaps are exactly the costs the seller takes on.

Why insurance is charged on the CIF value

Marine insurance is conventionally written at 110% of the CIF value, the extra 10% covering the buyer's expected profit and charges. That is why CIF = (FOB + freight) / (1 - 1.1 x rate) and why insurance must not be charged on the FOB value - the single most common way a quote ends up unprofitable.

Adding commission to a quote

A 5% commission can be handled two ways: added on top (quote = net x 1.05) or taken out of the quote (net = quote x 0.95, so quote = net / 0.95). The difference grows with order size, so the agreed basis belongs in the contract or the PI. The three prices here are net of commission.

Code example

JavaScript Insurance is 110% of CIF value - so it is division, not multiplication 

const k = 1 - 1.1 * rate / 100;   // rate in percent
const cfr = fob + freight;
const cif = cfr / k;              // not cfr * (1 + rate)
const insurance = cif - cfr;

// FOB 10000 + freight 500 at 0.3%:
// CIF = 10500 / 0.9967 = 10534.76, insurance 34.76

Python Work back from a buyer CIF target to your FOB floor 

def fob_from_cif(cif, freight, rate_pct):
    k = 1 - 1.1 * rate_pct / 100
    return cif * k - freight

fob_from_cif(20000, 500, 0.3)   # 19434.0, your FOB floor
# if the buyer pushes to 19000, re-run the conversion to check the margin

FAQ

What is the difference between FOB, CFR and CIF?

Only who pays freight and insurance: with FOB the seller is responsible up to the port of loading; with CFR the seller also pays the sea freight; with CIF the seller pays insurance too. The prices always run FOB <= CFR <= CIF, and the gaps are those extra costs.

Why is insurance calculated on the CIF value instead of the FOB value?

Marine insurance is written at 110% of the CIF value because that covers the delivered value of the goods, including freight and expected profit. Charging the rate against FOB would under-insure the shipment and leave the gap in your margin - on a full container that can be hundreds of dollars.

What insurance rate should I enter?

Rates commonly run 0.3% to 0.5%, depending on the cargo, route and cover: all risks costs more than WA or FPA, and fragile or electronic goods more than general cargo. Ask your insurer or forwarder for the actual rate, use 0.3% to start with, and correct the quote once the policy is issued.

How do I add a commission for the buyer?

Follow the agreed basis: added on top means net x (1 + rate); taken out of the quote means net / (1 - rate). With 5% commission the second method produces the higher quote because the commission comes out of it. The prices here are net of commission - convert separately, then quote.

Should I enter my FOB or my CIF price?

Enter whichever one you actually have and the tool returns all three. If the buyer asks for a CIF price, enter your FOB price to see it; if the buyer has given a CIF target, switch the basis to CIF and read the implied FOB floor to check whether the margin still works.

Freight keeps moving - how much room should I leave?

Sea freight swings with peak season, fuel and surcharges. State a validity period on the quotation, quote FOB so the freight risk sits with the buyer, or test with a conservative high freight figure so an increase does not eat the margin.

Why do I get an out-of-range warning when I enter a CIF price?

It means the CIF price minus freight no longer leaves a positive FOB value, so the quote does not even cover the freight. Check for a mis-typed freight amount, for example a full-container freight figure entered against a single unit, and make sure both values cover the same shipment.

Is this an official or carrier rate, and is my data uploaded?

No official rate is involved. The tool applies common trade conventions (widely used Incoterms plus 110% marine insurance cover) and does not include carrier surcharges, bank charges or import duties. Everything is computed in your browser: goods value, freight and rates never leave your device and it works offline.