Importing Wood Pellets: Incoterms 2020 for Wholesale Buyers
EXW, FOB, CFR, CIF, DAP — which incoterm protects the wood pellet importer, and where risk actually transfers on the journey.
Incoterms decide who arranges freight, who pays for it, and — critically — where risk of loss or damage transfers. The wrong incoterm can turn a good pellet contract into a legal nightmare.
EXW — Ex Works
Buyer collects from the mill. Cheapest headline price, but the buyer arranges inland transport, export clearance, and everything after. Rarely a good idea for first-time importers.
FOB — Free On Board
Seller delivers to the vessel at the origin port. Risk transfers when the goods are loaded. Standard for containerised wood pellet trade.
CFR / CIF
Seller arranges and pays for ocean freight (CFR) plus insurance (CIF). Risk still transfers at origin loading. Convenient for importers without freight relationships.
DAP — Delivered At Place
Seller handles everything up to the buyer's warehouse door except import clearance. Highest headline price, lowest logistical burden. Common for pilot shipments.
What to insist on
Whatever the incoterm, always require pre-shipment inspection, load-port certification, and marine insurance sized to invoice value plus 10%.
Pellet Industries ships ENplus A1 and industrial biomass pellets worldwide in 15 kg bags, big-bags, and bulk vessel loads.
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