FOB stands for Free On Board. With the FOB type of shipping agreement, the seller or shipper arranges for goods to be moved to a designated point of origin. Normally this is a port because FOB and other INCOTERM contracts are mainly intended for maritime shipping. However, FOB contracts are also used for inland and air shipments. Delivery is accomplished when the seller releases the goods to the buyer. FOB contracts stipulate that this occurs when the goods cross the rail of the ship. CIF When a CIF — Cost, Insurance and Freight — shipping agreement is used, the seller has responsibility for the cost of the goods in transit, providing minimum insurance and paying freight charges to move the goods to a destination chosen by the buyer. From the point of delivery at the destination, the buyer assumes responsibility for unloading charges and any further shipping costs to a final destination.