Negotiating FOB vs CIF Pricing in Indonesian Seafood Trade

A negotiation-first, Indonesia-specific walkthrough to convert a supplier’s CIF seafood quote into a clean, apples-to-apples FOB price. We map origin charges at Indonesian ports, show a simple CIF→FOB math method, and give a forwarder-handoff checklist and email wording to lock responsibilities.

If you’ve ever tried to convert a CIF quote from an Indonesian seafood supplier into FOB, you’ve felt the friction. Forwarders quote one set of numbers. Suppliers quote another. Someone double-bills THC. And reefer plug fees show up in the wrong ledger. Here’s the system we use inside Indonesia-Seafood to make CIF→FOB conversions clean, verifiable and negotiable.

The hook: how buyers actually save five figures per quarter

Three out of five buyers we onboard were overpaying under CIF by USD 400–1,200 per reefer container vs a buyer-nominated forwarder. Over a quarter, that’s USD 10k+ if you move weekly sailings. The fix isn’t to argue theory. It’s to standardize the math, expose the true ocean rate, and lock handoffs so origin charges don’t leak.

The three pillars of a clean CIF→FOB conversion

Map Indonesia-specific origin charges by port.
Verify the real ocean freight sitting inside the supplier’s CIF.
Lock responsibilities with a forwarder handoff so no one double-charges THC or plugs.

We’ll walk through each, then give you the exact email script and checklist we use.

Week 1–2: Baseline the numbers and validate freight

Here’s the thing. CIF quotes often bundle a freight markup, plus origin charges that may or may not be FOB-appropriate. You need an apples-to-apples baseline.

Request a CIF breakdown from the supplier including: ocean freight + BAF/LSS, insurance, origin THC, EMKL/export handling, VGM, PEB, reefer plug/monitoring, BL issuance/telex, truck-in to terminal. Ask for per-container and per-kg.
Get two spot reefer rates from buyer-nominated forwarders ex the right port and terminal. If you’re shipping Grouper Fillet (IQF) from Surabaya, ask for Surabaya (Tanjung Perak) to your POD. For tuna out of Bitung, ask Bitung direct or via transshipment. For shrimp, confirm Jakarta (Tanjung Priok) vs Surabaya lanes.
Compare. If the supplier’s embedded ocean rate under CIF is USD 500–1,000 higher than market, you’ve found your first negotiation lever.

Quick CIF→FOB math (example: Surabaya→Los Angeles, 40’ reefer)

Say your supplier quotes CIF LA at USD 6.20/kg for 24,000 kg net. You obtain from a forwarder:

Ocean freight all-in (base + BAF + LSS + reefer surcharges): USD 5,900
Cargo insurance: USD 0.08/kg for CIF equivalent.
Now convert:
CIF total value ≈ 6.20 × 24,000 = USD 148,800
Less ocean freight USD 5,900
Less insurance USD 1,920
Indicative FOB value ≈ USD 140,980, or USD 5.87/kg.
If the supplier refuses USD 5.87/kg FOB, ask them to show the exact ocean rate and insurance they used. Nine times out of ten, you uncover a hidden premium.

Pro tip: Payload matters. If the same product ships 20% lighter due to pack spec, your per-kg ocean freight jumps. For example, our Frozen Shrimp (Black Tiger, Vannamei & Wild Caught) or Yellowfin Saku (Sushi Grade) shipments often optimize carton size and glaze to hold payload closer to 24–26 tons where lane rules allow. If you want a sanity check on pack/payload for your lane, feel free to Contact us on whatsapp.

Week 3–6: Nominate your forwarder and lock the handoff

You can absolutely nominate your own forwarder on FOB from Indonesia. In practice, many exporters are used to handling EMKL tasks even under FOB. So specify who does what, in writing.

Forwarder handoff checklist (Indonesia)

Booking confirmation with vessel/voyage, CY cutoffs, SI cutoff, VGM cutoff.
Shipping Instructions (SI) naming exporter as shipper of record and buyer as consignee/notify.
Export docs from the shipper: Commercial invoice, packing list, HS codes, PEB reference, COO if needed, health certificate, and product registrations as required by destination.
Factory-to-port trucking slot, container release, and reefer PTI confirmation.
Terminal reefer plug and monitoring responsibility pre-loading agreed.
BL issuance and surrender/telex instructions agreed, including the fee owner.
Who pays what at origin: THC, EMKL/export handling, VGM, PEB, lift on/off, scanning if any.
Who pays what at destination: DTHC, import clearance, delivery.

Sample email to request a clean FOB breakdown

“Thanks for the CIF LA quote on Pinjalo fillets. We’d like to proceed FOB Surabaya using our forwarder. Please confirm your FOB price per kg and that you’ll cover origin export formalities through on-board, including EMKL/export handling, VGM, PEB, origin THC, PTI, and pre-loading reefer plug/monitoring through vessel cutoff. We’ll handle ocean freight, insurance, and destination charges. Kindly share your standard BL issuance/telex fee and who will settle it under FOB.”

Week 7–12: Scale, then optimize the origin cost stack

Once you run two or three shipments under FOB, you can negotiate the recurring origin items.

Typical Indonesia origin charges for reefer exports we see in 2025:

Origin THC: 20’ reefer USD 180–260. 40’ reefer USD 260–360.
EMKL/export handling (includes doc prep, terminal coordination, EDI): USD 120–220 per container.
VGM weighing: USD 20–45.
PEB processing (export declaration) and customs gate fees: USD 30–80.
Reefer plug and monitoring at terminal pre-loading: USD 18–35 per day.
BL issuance/telex: USD 35–75.
Factory-to-port trucking in Greater Surabaya/Priok: USD 120–280 depending on distance and access.

Port nuances: Surabaya (Tanjung Perak) THC can trend slightly lower than Jakarta (Tanjung Priok). Bitung reefer origin stacks for tuna sometimes add extra coordination or domestic feeder steps. Always ask for port-specific line items rather than “local charges”.

What’s interesting is how volatility shifts leverage. In the last six months, Pacific reefer rates have moved week to week with PSS and equipment surcharges. Under FOB, you’re free to chase spot savings without touching the factory price. That’s real control.

Short answers to the questions we get every week

Which origin charges must the exporter cover under FOB for reefer seafood?

Under Incoterms 2020, the seller covers all origin costs up to and including loading the container on board. In Indonesia that usually means EMKL/export handling, VGM, PEB, origin THC, pre-loading reefer plug and monitoring, seals, and BL issuance if the shipper is the BL party. Buyer pays ocean freight, insurance, and all destination charges.

How do I convert a supplier’s CIF Surabaya→LA shrimp price into FOB Surabaya?

Use this: FOB = CIF total − Ocean freight − Insurance. Get the real reefer ocean rate from your forwarder for the same payload and sailing. Remove that and the insurance from the CIF total, then divide by net kg for an FOB per-kg figure.

Can I nominate my own forwarder on FOB from Indonesia, and what docs do I send to the supplier?

Yes. Send your forwarder’s booking, SI template, and cutoffs. The supplier sends invoice, packing list, HS codes, PEB reference, health certs and COO as needed. Align who handles BL issuance and surrender.

Under FOB, who pays reefer plug and port storage if the vessel rolls in Jakarta?

Pre-loading plug/monitoring is the seller’s cost until on board. If your forwarder rolls the booking or the carrier delays after gate-in, agree in writing how extra plug or storage is split. We set a rule: seller covers up to original cutoff. Beyond that, costs linked to rollovers follow the party causing the rollover.

What’s the difference between THC, EMKL, and PEB fees in Indonesia—and who pays on FOB?

THC: Terminal Handling Charge. Crane/lift and terminal fees. Seller on FOB.
EMKL: Local forwarder/export handling fee for documentation and coordination. Seller on FOB.
PEB: Export declaration filing. Seller on FOB.

Is FOB appropriate for containerized seafood from Indonesia, or should I use FCA instead?

Strictly, FCA is the better Incoterm for container cargo. Many buyers still use FOB out of habit, and Indonesian terminals understand it. If you want textbook clarity, use FCA Named Place (e.g., factory gate or terminal) and specify who handles terminal charges and plug. If you keep FOB, document responsibilities as above.

How can I tell if a supplier’s CIF price includes a freight markup versus market ocean rates?

Ask for the ocean component used in CIF and compare it with two spot reefer quotes for the same week and payload. If there’s a persistent USD 300–1,000 gap, you’re likely paying a supplier-managed markup or a forwarder rebate they share. Under FOB, you capture that delta yourself.

Common mistakes to avoid when you convert CIF to FOB

Letting both sides pay THC. When switching terms, write to supplier and forwarder that “origin THC is for shipper under FOB; forwarder must not invoice buyer for origin THC.” That single line prevents 80% of double-billing.
Vague plug responsibility. Spell out who pays plug pre-cutoff and during delays. Include per-day rates.
Wrong payload assumptions. Confirm net vs gross and dunnage weight to get true per-kg ocean cost. If you’re planning a mix like Mahi Mahi Fillet and Grouper Fillet (IQF), align carton counts to avoid underfilling a reefer.

Resources and next steps

Use the CIF→FOB formula with live reefer rates before you even negotiate. It frames the conversation around facts.
Ask for a port-specific origin stack: Jakarta, Surabaya, or Bitung. Generic “local charges” is where padding hides.
Run one trial shipment under FOB with your forwarder, then lock a quarterly SOP so no cost leaks.

If you want a quick check on your supplier’s CIF vs market freight, we’re happy to review the lane and payload and recommend an FOB baseline. Questions about your project? Contact us on email, or browse our portfolio to match pack specs to payload: View our products.

We’ve run this playbook across Indonesian reefers for years. It’s practical, it’s transparent, and it puts you back in control of your landed cost. Once you see your first container land with no double-billed THC and a verifiable ocean rate, you won’t go back to mystery-CIF again.