CIF vs. FOB in Copper Scrap Contracts: Incoterms & Maritime Freight Guide
Published on October 15, 2026 by MillberryCopper.com Trade Intelligence Desk
Key Takeaways & Summary
Understand risk transfer, marine insurance coverage (Institute Cargo Clauses A), and ocean freight liabilities when contracting international copper scrap shipments.
Risk Transfer Points Under Incoterms 2020
In FOB (Free on Board) terms, the buyer assumes all marine freight costs, transit risks, and insurance once the copper scrap passes the ship's rail at the loading port. In CIF (Cost, Insurance, and Freight), the seller pays freight and provides marine insurance to the destination port, although risk transfers to the buyer upon ocean vessel loading.
Marine Cargo Insurance: Why Institute Cargo Clauses (A) are Mandatory
Because high-purity copper is a prime target for maritime pilferage, standard CIF scrap contracts mandate 'All Risks' insurance coverage under Institute Cargo Clauses (A) for 110% of invoice value, including piracy, container overboard loss, and moisture damage.
Demurrage and Detention Liabilities at Destination Ports
One of the largest hidden risks in scrap trading is destination port container detention. Experienced buyers negotiate a minimum of 14 to 21 free demurrage days with the carrier before cargo departs the origin port, allowing sufficient time for customs clearance.
Which Incoterm is Best for First-Time Scrap Buyers?
First-time buyers and manufacturers should always insist on CIF terms to avoid ocean freight rate volatility, shipping line carrier negotiations, and origin port handling complexities.
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