Are you venturing into the field of importing goods to Kenya? During our first business ventures we usually encounter difficult terms that are industry-specific.

You are probably scratching your head and wondering “what does CIF mean?” or “What is FOB?” For a newbie, the complexity of understanding these terms is just too much to handle.

In this blog, we will try to elaborate on the definitions of a few commonly used shipping terms to help you through the not-so-murky waters of import and export.

CIF: This stands for Cost, Insurance and Freight. This term is usually followed by the port of destination, for example “CIF Mombasa”. The price of the shipment will include sea cargo costs and insurance to deliver the goods to the port near you. The seller is required to pay this price to the carrier and as evidence, should provide the sale invoice, the bill of lading and the insurance policy.

FOB: Stands for Free on Board. This term is used in shipment agreements where the seller bears all costs and risks up to the point the goods are loaded on board the vessel. Thereafter, the responsibility of the sea freight transportation, bill of lading fees, marine insurance, and unloading is upon the buyer from the port to his doorstep.

Bill of Lading: This is a detailed list of a shipment of goods in the form of a receipt given by the carrier to the person consigning the goods. It is a document that details the nature, amount and destination of the goods being loaded on to the vessel. It also indicates the details of the consignee as well as the ports of loading and discharge.

CoC: The CoC is a Certificate of Conformity. This is a certification issued by an agency mandated by the Kenya Bureau of Standards (KEBS) to show that imported goods have satisfied the quality and safety requirements of the end-user. You can read more about CoC in this post.

IDF: This stands for Import Declaration Fee. It is a levy charged by the Kenya Revenue Authority on all imported goods. In Kenya, the IDF fee is at a rate of 2.25% of the CIF value or KES 5000 whichever is higher. For example, if you are importing a car whose CIF value is KES 800,000 you will pay KES 18,000 as IDF which represents 2.25% of the value. However, if the car’s CIF is KES 200,000 then you will pay a flat rate of KES 5000 because this is higher than 2.25% of the car’s CIF.

Goods being offloaded to a Sidoman Truck at the Port of Mombasa. Some shipping Terms may be difficult to understand [Image: Sidoman]

These are only some of the terms that you will encounter when doing your imports shipment by sea.

We will be exploring more shipping terms in future blog posts. In order to import goods to Kenya, you will require the services of a clearing agent who will process the import documentation through Kenya Customs via the KRA electronic portal and clear the goods on your behalf.

At Sidoman, we are your ready partner should you want to import goods to Kenya and will guide you every step of the way.