FOB or CIF: Choosing Your Incoterm
Under Incoterms 2020, FOB (Free on Board) means the seller delivers the goods on board the vessel at the named Indonesian port; the buyer arranges and pays for sea freight and insurance, and bears the risk from loading.
CIF (Cost, Insurance and Freight) means the seller also pays the freight and minimum insurance to the named destination port. Risk still passes to the buyer once the goods are on board in Indonesia, but the buyer does not need its own freight arrangements.
Pancadira quotes both. Buyers with their own forwarder usually choose FOB Jakarta or Surabaya; buyers without one choose CIF Port Moresby, Kiunga or Colombo.
Paying by Letter of Credit
Pancadira contracts in US dollars, with payment by irrevocable letter of credit at sight. The buyer’s bank pays only when the shipping documents agreed in the contract are presented, which protects both parties.
Specifications and Quality
- Dimensions, materials, voltage and plug type, colours and carton markings are agreed in writing before production starts.
- Physical samples and photographs are approved before the order is confirmed.
- Indonesian certifications such as SNI (the Indonesian National Standard) and Halal, and international standards where your market requires them, are supplied with the goods.
- Goods are inspected before shipment and container loading is supervised in Jakarta.
Consolidating Several Suppliers
Most project orders span several factories. Pancadira combines them into full containers in Jakarta, so the buyer receives one shipment, one invoice and one set of documents, rather than several part-loads from different suppliers.
The Six Stages of a Pancadira Order
- 1. Enquiry: product schedule, room count, specification or request for quotation.
- 2. Specifications and samples: factory selected and samples approved.
- 3. USD quotation: written offer, FOB Indonesia or CIF destination port.
- 4. Order and letter of credit: contract signed and settlement terms secured.
- 5. Inspection and stuffing: pre-shipment checks and container loading in Jakarta.
- 6. Shipment and documents: bill of lading and customs documents released.
Frequently Asked Questions
Can I buy from several Indonesian factories in one shipment?
Yes. Pancadira consolidates goods from several factories into one container under one contract.
In which currency are prices quoted?
In US dollars.
Which Indonesian ports do shipments leave from?
Mainly Tanjung Priok in Jakarta and Tanjung Perak in Surabaya.
What documents will I receive?
Commercial invoice, packing list, bill of lading, certificate of origin and any certificates or safety data sheets required for the goods.