Wood Pellet FOB vs CFR vs CIF: Buyer Guide - Indonesia Export Center [IEC]

IEC | INDONESIA EXPORT CENTER

UNDERSTANDING WOOD PELLET EXPORT PRICING TERMS

FOB Indonesia | CFR Destination Port | CIF Destination Port | Import Cost Planning

Understanding Incoterm Responsibilities

Comparing wood pellets FOB vs CFR vs CIF quotations?

International wood pellet buyers need to understand which party arranges freight, purchases insurance, and bears transportation risk under the agreed trade term.

IEC | Indonesia Export Center facilitates Indonesian wood pellet sourcing enquiries and encourages buyers to use clearly defined Incoterms in commercial negotiations.

DISCUSS YOUR WOOD PELLET IMPORT REQUIREMENTS

FOB, CFR and CIF Comparison

Term	Seller’s Main Transport Obligation	Insurance Obligation	Named Location
FOB	Deliver goods on board vessel	No automatic seller obligation	Port of shipment
CFR	Arrange and pay freight to destination port	No automatic seller obligation	Destination port
CIF	Arrange and pay freight and required insurance	Seller must arrange required insurance	Destination port

These descriptions refer to the relevant Incoterms 2020 rules.

Risk Transfer

Under FOB, CFR, and CIF, risk generally transfers from seller to buyer when the goods are delivered on board the vessel at the shipment port.

Under CFR and CIF, the seller’s obligation to pay freight to the destination does not mean the seller retains transit risk until arrival.

Freight and Insurance Scope

FOB Indonesia

Useful when the buyer wishes to arrange ocean freight and related transportation services.

CFR Destination Port

Useful when the seller arranges the main carriage, while the buyer considers separate cargo insurance.

CIF Destination Port

Includes the seller’s obligation to arrange the required marine insurance, subject to the applicable rule and contract.

Buyers should assess whether the insurance coverage is sufficient for their needs.

For some containerized shipments, FCA or other appropriate terms may better reflect the actual handover arrangement.

Comparative Quotation Inputs

To compare offers fairly, use the same:

Product specification
Quantity
Shipment period
Loading and destination ports
Cargo format
Quality testing requirements
Currency
Payment assumptions

Example Buying Workflow

Define the required wood pellet grade.
Confirm the shipment quantity.
Request a current COA.
Identify feasible loading and destination ports.
Compare FOB, CFR, and CIF offers.
Review insurance and freight exclusions.
Calculate import charges.
Agree on inspection and payment.
Confirm the written contract.
Arrange shipment documentation.

Wood Pellet RFQ

Subject: Indonesian Wood Pellets – FOB / CFR / CIF Comparison

Company: [Name]

Destination Country: [Country]

Quantity: [MT]

Fuel Specification: [Attach]

Indonesian Loading Port: [If Known]

Destination Port: [Port]

Requested Quotes: [FOB / CFR / CIF]

Insurance Requirements: [Specify]

Shipment Period: [Date]

Please provide comparable quotations showing inclusions, exclusions, and named ports.

REQUEST COMPARATIVE WOOD PELLET QUOTES

Frequently Asked Questions

Does CIF mean the seller carries all risk to destination?

No. Risk generally transfers when the goods are on board at origin.

Does CFR include insurance?

Not as a seller obligation.

Does FOB include import customs clearance?

No.

Which term is best?

The appropriate term depends on logistics, bargaining position, and the parties’ capabilities.

Discuss Indonesian Wood Pellet Trade Terms