The FOB method requires loaded products in their home country so that the condition of the commodities will determined, which has both benefits and drawbacks. Furthermore, dealing with customs papers will simplified. These customs papers are included in the exporter's expenses. Export taxes, transit expenses from warehouse to port, production costs from dock to ship, and acquisition costs are just a few examples. In this scenario, the importer is responsible for insurance, loading and unloading expenses at the destination port, and transportation costs until the commodity are delivered to the warehouse.
Meanwhile, under CIF, the exporter must pay the cost of travel to the target country's port, the cost of shipping and delivering the products, and the cost of insurance for the goods. This implies that the exporter bears the risk of loss and damage as well. This also means that the importer will have to pay a higher price since all of these costs are already incorporated in the price of the goods.