How to Compare CFR Quotations From Bangladeshi Suppliers

Consider three CFR quotations for the same order of cotton bath towels from Bangladesh: the cheapest headline names Hamburg, the middle names Felixstowe, and the most expensive names Rotterdam. Ranking those headlines compares three different voyages, not one, and the ranking can reverse once every quote is repriced to one destination port and the same onward costs are added.

CFR means Cost and Freight. Under Incoterms 2020, CFR is a rule for sea and inland waterway transport only: the seller contracts and pays freight to the named port of destination, while delivery and risk pass to the buyer when the goods are placed on board the vessel at the port of shipment.¹ The seller completes export formalities, and the buyer completes import formalities.¹ Neither party is obliged to insure under CFR, the single difference from CIF, where the seller must contract cargo insurance for the buyer.² See the Incoterms for shipments from Bangladesh guide for all eleven rules.

The method has four passes. First, normalize every quote to the same named destination port, because different destination ports carry different freight. Second, separate the freight-paid element from the risk-on-board point: a CFR price is goods plus freight to a port, with risk already with the buyer from loading. Third, add the same onward costs to every quote: insurance the buyer arranges, destination charges, duty and taxes from the schedule amount for the confirmed code, confirmed with a broker, broker fees, and warehouse delivery. Fourth, rank by landed cost per unit, never by headline CFR price alone. Landed cost is the total expense of a product after it has landed at its final destination.³

Why this matters for buyers and sellers

For the buyer, the headline hides two facts that most often decide the ranking. The first is the destination port inside the CFR price: freight to Hamburg, Rotterdam, and Felixstowe are three different amounts, bought on three different sailings, and a lower CFR price may simply carry a shorter or cheaper sea leg. The second is the split between freight paid and risk carried: the seller pays the freight, but the buyer carries the risk of loss or damage from the moment the goods go on board at the port of shipment, even though the seller booked and paid for the voyage.² A buyer who reads a CFR price as a delivered price will underinsure the voyage.

The seller side matters too: a seller farther from the port of shipment carries a longer inland leg inside the goods element of its CFR price. A cheaper sailing may also mean a slower service or tighter free time at destination, and free time runs against the buyer even though the seller chose the service.²

Step-by-step: how it works

Work through the seven steps, and rank no quote until it has passed all four passes.

1. Fix one specification. Send the same product, material, size, colour, quantity, packing, marking, and inspection requirement to every supplier in identical words.

2. Write both ports in full, with the edition. Record the port of shipment, the named port of destination, and Incoterms 2020 beside the rule, as in CFR Rotterdam, Incoterms 2020. A quote naming only a country goes back. Under the C rules, delivery and destination are distinct: delivery and risk sit at the port of shipment, while the named destination is where the seller must arrange transport.⁴

3. Split each CFR price into goods and freight. Ask every seller to state the goods element and the freight element separately, and to state what the freight contract already covers: whether discharge or destination terminal handling sits inside the seller-paid freight, or falls to the buyer at arrival. If the carriage contract covers that handling, the seller has paid it, and the destination agent should not invoice the buyer for it again.² A quote that will not split is not yet comparable.

4. Reprice every quote to one destination port. Choose one destination port, and replace each quote's freight element with one common freight figure to that port, obtained from a forwarder for the same cargo form and sailing window. Keep the original quoted prices on the sheet, so the repricing stays auditable.

5. Add the same onward costs. To each repriced CFR price, add insurance the buyer arranges from the on-board point, destination handling not covered by the freight contract, duty and taxes from the schedule amount for the confirmed code, confirmed with a broker, broker fees, and warehouse delivery, all to the same warehouse.³ Use one destination, one currency, and one quantity for every quote. Arrange insurance from loading, because the buyer holds the risk from that point.²

6. Rank by landed cost per unit, then test the ranking. Divide each total by the same quantity, then change one variable at a time: a higher freight figure or a later sailing. A ranking that flips on a small change is a sign to confirm that line first.

7. Confirm validity, timing, and payment in writing. Record price expiry, ready date, loading window, vessel and sailing details, notice of loading, payment method and timing, currency, bank charges, insurance start point, and document set.

Costs, timelines and documents

Cost lines in a CFR comparison

Build the total in this order: CFR price as quoted, goods and freight elements inside it, repriced CFR price to the chosen destination port, insurance the buyer arranges, destination handling not in the freight contract, duty and taxes from the schedule amount for the confirmed code, confirmed with a broker, broker fees, and warehouse delivery. The CFR price covers the goods, packaging and marking, inland transport to the port of shipment, export clearance, loading on board, and ocean freight to the named destination port.¹ Everything after the destination port is a buyer line.¹

The table below uses Example figures only, for 960 cartons of cotton bath towels. Every figure in this table is an Example figure. Quote 1 has the lowest headline price, but it names Hamburg, not Rotterdam. After repricing all three quotes to CFR Rotterdam and adding the same onward costs, Quote 3 has the lowest landed cost per unit. Duty in each column is an example schedule amount: replace it with the amount from the schedule for your confirmed code, confirmed with a broker.

| Example figures: 960 cartons of cotton bath towels | Quote 1 | Quote 2 | Quote 3 | | CFR price as quoted, example figure | $21,000 | $22,400 | $21,600 | | Destination port named in the quote | Hamburg | Rotterdam | Felixstowe | | Freight element inside the CFR price, example figure | $1,900 | $2,900 | $3,100 | | Goods element, example figure | $19,100 | $19,500 | $18,500 | | Repriced CFR Rotterdam, example figure | $22,000 | $22,400 | $21,400 | | Insurance arranged by the buyer, example figure | $260 | $260 | $260 | | Destination handling at Rotterdam, example figure | $410 | $410 | $410 | | Duty and taxes, schedule amount for the confirmed code, confirmed with a broker, example figure | $1,260 | $1,300 | $1,190 | | Broker fees and warehouse delivery, example figure | $520 | $520 | $520 | | Landed total, example figure | $24,450 | $24,890 | $23,780 | | Landed cost per carton, example figure | $25.47 | $25.93 | $24.77 |

Read the table by column, not by headline. Quote 1 wins on headline price and loses on landed cost per unit, because its goods element is high and its cheap Hamburg freight flattered the headline. The repricing pass saves $0.70 per carton against the cheapest headline.

Timelines

There are no typical costs or timelines that hold for every CFR order, because the cargo form, the route, the sailing, and the destination schedule all change the total. Ask for separate dates rather than a single delivery promise: price expiry, production finish, readiness at the port of shipment, loading window, sailing date, arrival window, and free time at the destination port. A slow sailing chosen for a low freight element can cost more in waiting time than it saved on freight.² Record the notice the seller will give once the goods are on board.

Documents

Ask for the document set in writing before ranking. The set normally includes the commercial invoice showing the CFR price and the named destination port, the packing list, the export clearance papers the seller completes, the transport document covering carriage to the named destination port, and the insurance certificate or policy for the cover the buyer arranges from the on-board point, plus the product code confirmation used for the schedule amount for the confirmed code, confirmed with a broker, and the import declaration papers for arrival.

Bangladesh-specific rules and tips

Start with the shipment port, not the destination port. Most Bangladeshi sea shipments load at Chattogram or Mongla, and the inland leg from the factory to the load port sits inside the goods element of the CFR price, so a supplier farther inland is not necessarily more expensive on the goods themselves.

Keep export clearance with the seller and import clearance with the buyer. Under the C rules, the seller completes export formalities and the buyer completes import formalities and any transit customs.¹ If a supplier offers to handle import clearance at destination as part of a CFR price, treat that as a separate service with its own price line.

Check the destination handling position twice, because it is the most common double charge in a CFR file. If the seller-paid freight already covers discharge or destination terminal handling, that charge must not appear again as a buyer line.²

Mind the container gap. The sea rules assume the seller controls the goods until they are on board, but a container is handed to a terminal days before loading, so between gate-in and loading the seller carries risk for goods it no longer controls.² Discuss that gap with your forwarder before settling on CFR.

Mistakes and red flags

• Ranking on the headline CFR price without repricing to one destination port.

• Comparing quotes naming different destination ports as if they covered the same voyage.

• Reading a CFR price as a delivered price, and assuming risk stays with the seller until arrival, when risk passes on board.¹

• Assuming insurance is included, when neither party is obliged to insure under CFR, unlike CIF, where the seller must contract cover for the buyer.² See the CIF guide.

• Accepting a destination handling charge twice: once inside the seller-paid freight, and once from the destination agent.

• Accepting wording such as CFR to a warehouse or door, when CFR names a port of destination, not an inland place.²

• Using a duty figure copied from another product, supplier, or destination, instead of the schedule amount for the confirmed code, confirmed with a broker.

• Comparing quotes for different specifications, packing forms, or quantities.

• Leaving the insurance start point unwritten, so a loss at sea finds no cover in force from loading.

• Accepting an expired price, an unconfirmed load port, or a sailing window ending before the goods are ready.

Checklist

• One specification sheet sent in identical words to all suppliers.

• Both ports in full, with Incoterms 2020 beside the rule.

• Every CFR price split into goods and freight elements.

• Every quote repriced to one destination port with one common freight figure.

• Insurance arranged by the buyer from the on-board point, start point written down.

• Destination handling checked against the freight contract, so no charge appears twice.

• Duty and taxes from the schedule amount for the confirmed code, confirmed with a broker, never copied from another shipment.

• Broker fees and warehouse delivery added on the same basis.

• Landed cost per unit calculated on the same quantity, currency, and warehouse.

• Validity, loading window, vessel, payment terms, and document set confirmed in writing.

How Exportain helps

Post an RFQ stating the specification, quantity, destination port, and Incoterm in full, so every supplier quotes the same voyage and goods. On Exportain, an RFQ states quantity and unit, target price, destination, Incoterm, required certifications, and deadline. Keep the destination port identical across every RFQ and counter-offer, and ask each quoting supplier for the goods and freight split before you rank. Exportain records quotations with unit price, MOQ, lead time, Incoterm, payment terms, and validity, so the comparison sheet can be checked against the same fields for every supplier. Exportain is not a party to the contract for the goods.

FAQs

What should I know first about CFR?

Know first that CFR means Cost and Freight, and that it applies only to sea and inland waterway transport.¹ The seller delivers on board at the port of shipment, contracts and pays freight to the named port of destination, and completes export clearance, while risk passes to the buyer on board.¹ Neither party is obliged to insure under CFR, so arrange your own cover from loading.²

What are the typical costs and timelines?

No typical costs or timelines hold for every CFR order, because the cargo form, the load port, the route, the sailing, and the destination schedule all change the total. The structure is stable: repriced CFR price to one destination port, insurance the buyer arranges, destination handling not in the freight contract, duty and taxes from the schedule amount for the confirmed code, confirmed with a broker, broker fees, and warehouse delivery, giving landed cost per unit.³ For timelines, ask for those dates separately.

Which documents are needed?

Confirm the commercial invoice showing the CFR price and the named destination port, the packing list, the export clearance papers the seller completes, the transport document covering carriage to the named destination port, and the insurance certificate or policy for the cover the buyer arranges from the on-board point, plus the product code confirmation used for the schedule amount for the confirmed code, confirmed with a broker, and the import declaration papers for arrival.

What are the most common mistakes?

Ranking on the headline CFR price, comparing quotes to different destination ports without repricing them, reading freight paid as risk covered, assuming insurance is included, paying destination handling twice, accepting CFR wording to a warehouse instead of a port, and using a duty figure without checking the schedule amount for the confirmed code with a broker. Each mistake changes the landed cost per unit without changing the product.

Next steps on Exportain

Start with one destination port and one specification. Post a free RFQ with the destination port, quantity, and Incoterm stated in full, then read the how to buy guide for the quotation and acceptance steps. When a quote arrives without a freight split, send it back for the split before ranking.