FOB vs CIF: Which Shipping Term Should You Choose When Buying Stone Blocks from Iran?

Every Proforma Invoice from an Iranian natural stone exporter quotes a price followed by three letters: FOB. Most buyers in the stone trade understand at a basic level that FOB means the price covers the stone loaded onto a ship at Bandar Abbas — but the practical implications of that arrangement, and the comparison with the alternative term CIF, are less well understood.

Getting this decision right has direct financial consequences. On a 500-ton container shipment of Pietra Gray marble or Gohare beige limestone, the difference between FOB and CIF arrangements can mean thousands of dollars in either saved costs or unexpected exposures — depending entirely on which term you choose and whether it matches your logistics capability and risk appetite.

This guide explains both terms clearly, maps out exactly who pays what under each arrangement, compares them for different buyer profiles, and gives you a practical framework for calculating your true landed cost from Bandar Abbas port to your facility.

What Are Incoterms and Why Do They Matter?

Incoterms (International Commercial Terms) are a standardized set of 11 trade terms published by the International Chamber of Commerce (ICC). The current version, Incoterms 2020, has been in effect since January 1, 2020 and remains the authoritative standard as of 2026.

Incoterms define three things for every international sale:

1. Who is responsible for each stage of transport — from the seller's warehouse to the buyer's facility
2. Who pays for each stage — inland transport, port handling, ocean freight, insurance, customs clearance
3. At what point risk transfers from seller to buyer — the moment from which the buyer bears the financial consequences if goods are lost or damaged

In the natural stone trade, two Incoterms dominate: FOB (Free On Board) and CIF (Cost, Insurance and Freight). A third term, EXW (Ex Works), is occasionally used for buyers with their own logistics partners in Iran. Understanding the difference between these terms is one of the most practically important pieces of knowledge any stone importer can have.

FOB Explained: Free On Board Bandar Abbas

FOB (Free On Board) means the seller's responsibility ends when the goods are loaded aboard the vessel at the named port of shipment — in the case of Iranian stone exports, Bandar Abbas (Shahid Rajaee Port).

What the seller pays under FOB

• Stone block cost
• Packaging (wooden cradles, steel strapping, ISPM 15 compliant timber)
• Inland transport from quarry/storage yard to Bandar Abbas port
• Export customs clearance and documentation in Iran
• Port handling charges at Bandar Abbas up to and including loading on the vessel
• Phytosanitary certificate and Certificate of Origin

What the buyer pays under FOB

• Ocean freight from Bandar Abbas to your destination port
• Cargo insurance (optional but strongly recommended)
• Destination port handling and terminal charges
• Import customs clearance and duties in your country
• Inland transport from your port to your facility

When risk transfers under FOB

Risk passes from seller to buyer at the moment the goods are loaded on board the vessel at Bandar Abbas. If the vessel is delayed, goods are damaged in transit, or a container falls overboard, the buyer bears that risk from the point of loading. This is why cargo insurance — while technically optional — is strongly recommended for any FOB shipment of significant value.

Why FOB is the standard term in Iranian stone export

FOB Bandar Abbas is the near-universal pricing standard in the Iranian natural stone export market. All prices quoted on the Iranmarbles product pages — Pietra Gray marble from $220/ton, Gohare limestone from $112/ton, Patris limestone from $99/ton — are FOB Bandar Abbas prices. This is the established market convention and the baseline for all price comparisons between Iranian stone suppliers.

CIF Explained: Cost, Insurance and Freight

CIF (Cost, Insurance and Freight) means the seller is responsible for delivering goods on board the vessel at the port of shipment AND for paying the ocean freight and cargo insurance to the named destination port.

What the seller pays under CIF

Everything under FOB, plus:

• Ocean freight from Bandar Abbas to the named destination port
• Cargo insurance (minimum Clause C of Institute Cargo Clauses — covers major losses)

What the buyer pays under CIF

• Destination port handling and terminal charges
• Import customs clearance and duties in your country
• Inland transport from your port to your facility

The critical risk distinction under CIF

This is where CIF creates a counterintuitive situation that confuses many buyers: under CIF, risk still transfers to the buyer when goods are loaded at Bandar Abbas — even though the seller arranges and pays for freight and insurance to the destination port.

This means: if goods are damaged in transit between Bandar Abbas and your destination port, you bear the financial risk, even though you didn't arrange the freight or insurance contract. Your remedy is against the insurance policy that the seller purchased — but you had no input into which insurer was chosen, what coverage level was selected, or what exclusions apply.

This distinction — seller pays for freight and insurance but buyer bears the risk — is one of the most misunderstood aspects of CIF and a significant reason why experienced importers often prefer FOB with their own insurance arrangement.

FOB vs CIF: A Complete Side-by-Side Comparison

EXW: The Third Option for Buyers with Iran Logistics Partners

A third term worth knowing for completeness: EXW (Ex Works) means the seller's responsibility ends at their warehouse or storage yard — in Iranmarbles' case, the Khorramabad facility. The buyer is responsible for all costs and logistics from that point, including inland transport within Iran to Bandar Abbas, export customs clearance, ocean freight, insurance, and import clearance.

EXW gives the buyer maximum control — useful if you have a dedicated freight forwarder in Iran with established relationships and competitive rates for inland transport. However, EXW also places the maximum administrative burden on the buyer, including managing Iranian export documentation and customs — a complex process for buyers without Iran-specific logistics experience.

For most international buyers, FOB remains the most practical and cost-efficient term — the seller handles all Iran-side logistics, and the buyer takes control from the moment goods board the vessel.

Which Term Is Right for You? A Buyer Profile Framework

Calculating Your True Landed Cost: The Complete Formula

The most important financial exercise any stone importer can perform before committing to an order is calculating their true landed cost — the total cost per ton of stone delivered to their facility. FOB price alone is not a meaningful comparison figure; it is only the starting point.

The landed cost formula

Landed Cost per Ton =
  FOB price per ton
+ Ocean freight per ton (total freight ÷ net stone weight)
+ Cargo insurance per ton
+ Destination port handling per ton
+ Import customs duty per ton (% of CIF value × duty rate)
+ Inland delivery per ton

Worked example: 20ft container of Gohare limestone to China

Assumptions:

• Stone: Gohare beige limestone, Exportable Quality
• FOB price: $112/ton
• Container: 20ft, 22 tons net stone weight
• FOB total: $112 × 22 = $2,464

This worked example illustrates two important points:

First: Ocean freight adds $27–41 per ton to a $112/ton stone — roughly 24–37% on top of the FOB price. For higher-priced stones like Pietra Gray marble at $220/ton FOB, the same freight cost represents only 12–19% of the FOB price — meaning freight is proportionally less significant for premium stones.

Second: The full landed cost of Gohare limestone at approximately $146–162/ton in China still compares favorably against domestically processed Chinese limestone equivalents and Turkish beige limestone imports at their respective landed costs. The FOB advantage of Iranian stone is maintained through the supply chain.

Freight cost reference: Bandar Abbas to major destinations

Based on current market data, approximate ocean freight ranges for a 20ft container from Bandar Abbas:

Note: Ocean freight rates fluctuate significantly with market conditions, fuel surcharges, and seasonal demand. Always obtain current quotes from your freight forwarder before finalizing an order.

The Insurance Question: Don't Skip This Step

Whether you ship FOB (and arrange your own insurance) or CIF (where the seller arranges minimum coverage), cargo insurance for natural stone deserves careful attention.

Why stone shipments need insurance

Stone blocks are heavy, dense, and loaded in wooden cradles inside steel containers. Container shipping is generally reliable, but losses do occur: containers can be damaged by crane accidents during loading or discharge, sea water intrusion can cause staining on susceptible stones, and in rare cases containers are lost overboard in severe weather. A 20ft container of Pietra Gray marble at $220/ton represents a stone value of $4,400–$5,500 depending on net weight — plus your freight cost. Without insurance, any damage during transit is an unrecovered loss.

FOB with buyer-arranged insurance: the recommended approach

Under FOB with buyer-arranged insurance, you purchase a cargo insurance policy that covers the full transit from the moment risk passes at Bandar Abbas to delivery at your facility. This gives you:

• Coverage of your choice — you can select All Risk (Institute Cargo Clauses A) rather than the seller's minimum Clause C
• Direct claim relationship — if damage occurs, you claim directly against your insurer, not through the seller's policy
• Consistent coverage — if you import regularly, a blanket open cargo policy covers all shipments automatically at a negotiated rate

Standard All Risk cargo insurance for natural stone typically costs 0.2–0.4% of the insured value (CIF value at destination). On a $4,500 stone shipment, this is $9–18 — a trivial cost relative to the protection it provides.

Practical Steps: Setting Up Your FOB Import

If you are importing from Iran for the first time under FOB terms, here is the practical setup required:

Step 1: Appoint a freight forwarder in your country

Choose a freight forwarder familiar with Iran origin shipments — they will handle ocean freight booking, Bill of Lading management, and cargo tracking. Ask specifically whether they have handled Bandar Abbas origin cargo; experienced forwarders will have established carrier relationships for this route.

Step 2: Confirm your destination port charges

Ask your forwarder for a full breakdown of destination port charges — Terminal Handling Charges (THC), customs examination fees, and any local delivery charges. These vary significantly by port and can add $150–$400 per container.

Step 3: Arrange cargo insurance

Contact your freight forwarder or a marine cargo insurer. For natural stone imports, request Institute Cargo Clauses (A) — All Risk cover. Provide the CIF value (FOB value + estimated freight) as the insured amount.

Step 4: Confirm the HS code with your customs broker

The primary HS codes for Iranian stone blocks are:

• 2515.12 — marble and calcareous stone in rough or roughly trimmed blocks
• 6802.21 — worked marble for building or monuments

Your customs broker will confirm the applicable code for your country's import tariff schedule and calculate the applicable import duty rate. Some countries — particularly those with active stone processing industries — apply import duties on raw stone blocks; others exempt them. Know your duty rate before finalizing your landed cost calculation.

Step 5: Provide your supplier with complete shipping instructions

Before your order is loaded, provide your Iranian supplier with:

• Your nominated freight forwarder's contact details and any specific carrier preferences
• Your destination port (full port name and country)
• Any specific Bill of Lading instructions (consignee name, notify party, marks and numbers)
• Whether you require an original B/L or a Telex/Electronic release

Summary: FOB vs CIF Decision Framework