Coal trading Incoterms define who arranges and pays for freight and insurance, and exactly when risk passes from seller to buyer. The three most common terms in seaborne coal are FOB, CFR and CIF. Choosing the right one protects your margin and clarifies responsibilities.
FOB — Free On Board
Under FOB, the seller delivers the coal onto the vessel at the load port. From that point, the buyer arranges and pays for ocean freight and insurance, and bears the risk. FOB suits buyers with chartering capability who want control over shipping costs.
CFR — Cost and Freight
Under CFR (sometimes written C&F), the seller pays for freight to the named destination port, but risk still transfers to the buyer once the coal is loaded. The buyer arranges insurance. CFR is popular where buyers prefer the seller to handle chartering.
CIF — Cost, Insurance and Freight
Under CIF, the seller pays for freight and marine insurance to the destination port. As with CFR, risk passes on loading, but the seller provides insurance cover. CIF offers buyers the simplest, most hands-off arrangement.
ASWP — Any Safe World Port
You will often see terms quoted as “CIF ASWP Vietnam”, meaning delivery to any safe port within the named range. This gives flexibility in nominating the final discharge port.
Which Term Should You Choose?
- Choose FOB if you can charter competitively and want cost control.
- Choose CFR if you want the seller to arrange shipping but will insure yourself.
- Choose CIF for the simplest delivered solution with insurance included.
Unsure which structure fits your trade? Speak with our trading desk for a clear, transparent offer.
