Every timber quote comes with an Incoterm, and the two you will see most often are FOB and CIF. They decide who pays for freight and insurance, who books the ship, and, most importantly, when the risk of loss or damage passes from the seller to the buyer. Understanding fob vs cif timber pricing helps you compare quotes properly, avoid surprise costs at the port and choose the terms that suit your business.
In this guide we explain both terms in plain language, show what each price includes, compare the pros and cons for timber buyers, and explain how we quote at Global Timber Trade Hub. We also cover related terms such as CFR, FCA and CIP, and common mistakes we see from first-time importers.
In short
- FOB: the seller loads the timber on the ship; the buyer pays freight and insurance.
- CIF: the seller pays freight and minimum insurance to the destination port.
- Under both, risk passes to the buyer when the goods are on board at origin.
- FOB gives the buyer control over shipping; CIF is simpler for new importers.
- CIF insurance is minimum cover; many buyers add extra cover.
- Neither term includes import duties, port charges at destination or delivery inland.
What are Incoterms?
Incoterms are standard trade terms published by the International Chamber of Commerce (ICC). The current version is Incoterms 2020. Each term defines who arranges and pays for transport, insurance, export and import clearance, and at what point risk transfers. Using a recognised term avoids arguments, because both sides know exactly what the price includes. Always write the term with the named place and the version, for example “FOB Douala, Incoterms 2020” or “CIF Antwerp, Incoterms 2020”.
What does FOB mean?
FOB stands for Free On Board. The seller delivers the timber, cleared for export, on board the ship chosen by the buyer at the named port of shipment, such as Douala, Kribi, Owendo or Pointe-Noire. The seller pays for everything up to that point: production, drying, packing, inland transport to the port, export documents, export taxes and loading. The buyer pays sea freight, insurance, unloading at destination, import duties and onward delivery.
What does CIF mean?
CIF stands for Cost, Insurance and Freight. The seller does everything required under FOB and also books and pays for sea freight to the named destination port, and buys minimum cargo insurance for the buyer’s benefit. The buyer pays for unloading charges not included in freight, import clearance, duties, taxes and delivery from the port.
The key point: when risk passes
Many buyers think that under CIF the seller is responsible until the timber arrives. That is not the case. Under both FOB and CIF, risk passes from seller to buyer once the goods are on board the ship at the port of shipment. If a container is damaged at sea under CIF, the buyer claims on the insurance the seller bought. Under FOB, the buyer claims on their own insurance. That is why insurance matters under both terms.
FOB vs CIF at a glance
| Cost or task | FOB | CIF |
|---|---|---|
| Timber, drying, packing | Seller | Seller |
| Inland transport to port | Seller | Seller |
| Export documents and taxes | Seller | Seller |
| Loading at origin | Seller | Seller |
| Booking the ship | Buyer | Seller |
| Sea freight | Buyer | Seller |
| Cargo insurance | Buyer (optional but wise) | Seller (minimum cover) |
| Risk during sea transport | Buyer | Buyer |
| Destination port charges | Buyer | Buyer (unless in freight) |
| Import duties and taxes | Buyer | Buyer |
Advantages of FOB for timber buyers
- Control: you choose the shipping line, route and forwarder.
- Freight costs: large importers often get better freight rates than sellers.
- Insurance: you set the level of cover you need.
- Transparency: the timber price and freight are separate and easy to compare.
- Consolidation: you can combine shipments from several suppliers.
Advantages of CIF for timber buyers
- Simplicity: one price to your port, ideal for first-time importers.
- Less admin: the seller books the ship and handles freight documents.
- Easy budgeting: you know the landed cost at the port before duties.
- Useful for small buyers: no need for a freight forwarder contract.
Disadvantages to watch
Under CIF, the seller chooses the shipping line and may choose the cheapest option, which can mean slower transit or more transhipment. CIF insurance is only minimum cover, usually Institute Cargo Clauses (C), which covers major events but not all damage, so many buyers buy extra cover. Destination charges such as terminal handling can also surprise buyers who think CIF covers everything. Under FOB, the buyer must organise freight and insurance, which takes time and knowledge.
How to compare FOB and CIF quotes
To compare a FOB quote with a CIF quote, add sea freight, insurance and any origin port charges not included to the FOB price. Divide by the number of cubic metres in the container to get a cost per m³. For example, a 40 ft container of 50 m³ of sawn timber at $850 per m³ FOB is $42,500. If freight and insurance to your port add $4,000, the comparable CIF price is about $46,500, or $930 per m³. If a CIF quote for the same specification is below that, it is cheaper; if above, FOB plus your own freight may be better. See our timber shipping cost guide.
CFR, FCA and CIP
- CFR (Cost and Freight): like CIF but without insurance; the buyer insures.
- FCA (Free Carrier): the seller hands goods to the carrier at a named place, such as a container terminal. The ICC recommends FCA for containerised cargo.
- CIP (Carriage and Insurance Paid To): like CIF but for any transport mode, with a higher minimum insurance level under Incoterms 2020.
FOB and CIF were designed for sea and inland waterway transport where goods are loaded directly onto the ship. Most timber now moves in containers, which are handed over at a terminal before loading, so some buyers and banks prefer FCA or CIP. In practice, FOB and CIF are still widely used in the timber trade, and what matters is that both sides understand and agree the terms.
Insurance for timber shipments
Insurance under CIF is usually for 110% of the invoice value on minimum terms. Timber is fairly robust cargo, but containers can be lost overboard, damaged by water, or delayed. Many buyers add all-risks cover. Under FOB, arrange cover from the moment of loading at origin. Ask your insurer about cover for moisture damage, mould and delays, which are the most common timber claims.
Documents you will receive
Under both terms, the seller should provide the commercial invoice, packing list, bill of lading, certificate of origin, phytosanitary certificate, export permits and, for CITES species, CITES permits. Under CIF you also receive the insurance certificate. Check that documents match your letter of credit if you use one. See our letter of credit for timber and phytosanitary certificate guides.
How we quote at Global Timber Trade Hub
Our website prices are shown FOB at a Central African port, so you can compare timber costs clearly. On request, we quote CFR or CIF to your port, using freight rates from the lines that serve West and Central Africa. Many experienced importers prefer FOB and use their own forwarder; many first-time buyers prefer CIF. We are happy to work either way. See our export process and shipping and delivery policy.
Which should you choose?
If you import regularly, have a freight forwarder and want control over shipping and insurance, FOB usually gives better value and flexibility. If you are importing for the first time, buying a single container or want one simple price to your port, CIF is easier. Either way, ask for both prices and compare the total cost.
Payment terms and Incoterms
Incoterms say who pays for transport and insurance; they do not say when or how the buyer pays for the timber. That is agreed separately. Common options in the timber trade are a deposit with balance against copies of documents, cash against documents through banks, or a letter of credit. Under a letter of credit, the bank checks that the documents match the Incoterm, for example that a CIF shipment includes an insurance certificate. Mismatches between the Incoterm in the contract, the invoice and the credit are one of the most common reasons for delays in payment. Agree the Incoterm and payment terms together, and make sure every document uses the same wording.
Incoterms and EUDR or Lacey Act paperwork
Whatever Incoterm you choose, the importer of record carries legal duties at the destination: due diligence statements under EU rules, the Lacey Act declaration in the United States, and similar rules elsewhere. The seller should provide the information you need, such as species, origin and harvest details, but the filing is yours. See our EUDR timber compliance and Lacey Act timber imports guides.
Common mistakes
- Thinking CIF means the seller carries the risk at sea: risk passes at loading.
- Forgetting destination charges: terminal handling and delivery are extra.
- Relying on minimum insurance: consider all-risks cover.
- Not naming the port and Incoterms version: write both in every contract.
Our honest advice
Use FOB once you have a good forwarder and regular volumes; it gives control and clear pricing. Use CIF for your first containers to keep things simple, but buy extra insurance and budget for destination charges. Whatever you choose, put the term, named place and Incoterms version in the contract.
Sources
Related guides
- How to import timber from Africa
- How much timber fits in a 40 ft container
- Timber inspection before shipment
- African timber exporter
- Our FAQ
Frequently asked questions about fob vs cif timber
Is FOB or CIF cheaper for timber?
It depends on freight rates; large importers often save with FOB and their own forwarder.
Who is responsible for damage at sea under CIF?
The buyer carries the risk, but claims on the insurance the seller bought.
Does CIF include import duties?
No. Import duties, taxes and destination charges are paid by the buyer.
Do you quote CIF?
Yes. Our website prices are FOB, and we quote CFR or CIF to your port on request.
Get a FOB or CIF quote
Send us your species, specification, volume and destination port through our quote form. We will reply with FOB and CIF prices so you can compare.