Most timber contracts — sawn lumber, plywood, pellets — are priced on one of four Incoterms. They decide who arranges transport, who pays for each leg, and the exact point where risk passes from seller to buyer. Pick the wrong one and a cheap-looking price can cost more than a dearer one.
FOB — Free On Board
The seller delivers the timber, cleared for export, onto the vessel at the origin port; from that point the buyer owns the risk and arranges and pays the ocean freight. FOB suits buyers with their own freight contracts or a reliable forwarder, who want to control the shipping leg. For Russian origin that usually reads FOB St. Petersburg or FOB Novorossiysk.
CFR — Cost and Freight
The seller arranges and pays the freight to the named destination port — but risk still passes to the buyer once the goods are on board at origin. CFR is the workhorse for buyers who want a single landed-to-port price without managing carriers themselves. Think CFR Shanghai or CFR Alexandria.
CIF — Cost, Insurance and Freight
CIF is CFR plus marine cargo insurance arranged by the seller to the destination port. It is the simplest term for a buyer who wants freight and a baseline insurance policy bundled in — just check the cover level, which under the default is minimum, and top it up if your cargo warrants it.
DAP — Delivered At Place
The seller carries the goods all the way to a named inland place — a yard, a rail terminal, a warehouse — with the buyer handling only import clearance and duties. DAP matters for the rail corridor into China and Central Asia, where the deal is often quoted to an inland destination rather than a seaport.
Which to choose
- You have your own freight and want maximum control → FOB.
- You want a landed-at-port price and will insure yourself → CFR.
- You want freight and insurance handled → CIF.
- You want it delivered inland, especially by rail → DAP.
Whatever the term, a clean contract also fixes specification, packing, inspection and payment. We quote on all four and will tell you honestly which gives you the better landed cost for your route.
Note: this is a plain-language summary, not legal advice. Incoterms® 2020 is the current set and the precise obligations are defined by the ICC; confirm the exact rule, named place and insurance level in your contract.