Freight Trading in Bulk Commodity Supply Chains

Mads Frank Markussen; Liping Jiang

Learning tool 06 · Delivered parity

FOB vs freight vs CFR

A cheap origin is not necessarily cheap when delivered. Change the FOB or freight assumptions and see which wheat origin wins each shipment month.

Read the CFR matrix in the book

Interactive book table · Chapter 5

FOB + freight = delivered CFR

Change an input to see the delivered parity update. The lowest CFR origin is recalculated for each month.

DestinationAbidjan, Ivory CoastIllustrative wheat values · USD/mt

Focus shipment month

FOB matrixEditable inputs

Origin	Jul 26	Aug 26	Sep 26	Oct 26
Constanta	FOB matrix, Constanta, Jul 26	FOB matrix, Constanta, Aug 26	FOB matrix, Constanta, Sep 26	FOB matrix, Constanta, Oct 26
Novorossiysk	FOB matrix, Novorossiysk, Jul 26	FOB matrix, Novorossiysk, Aug 26	FOB matrix, Novorossiysk, Sep 26	FOB matrix, Novorossiysk, Oct 26
New Orleans	FOB matrix, New Orleans, Jul 26	FOB matrix, New Orleans, Aug 26	FOB matrix, New Orleans, Sep 26	FOB matrix, New Orleans, Oct 26
Kwinana	FOB matrix, Kwinana, Jul 26	FOB matrix, Kwinana, Aug 26	FOB matrix, Kwinana, Sep 26	FOB matrix, Kwinana, Oct 26

+

Freight matrixEditable inputs

Origin	Jul 26	Aug 26	Sep 26	Oct 26
Constanta	Freight matrix, Constanta, Jul 26	Freight matrix, Constanta, Aug 26	Freight matrix, Constanta, Sep 26	Freight matrix, Constanta, Oct 26
Novorossiysk	Freight matrix, Novorossiysk, Jul 26	Freight matrix, Novorossiysk, Aug 26	Freight matrix, Novorossiysk, Sep 26	Freight matrix, Novorossiysk, Oct 26
New Orleans	Freight matrix, New Orleans, Jul 26	Freight matrix, New Orleans, Aug 26	Freight matrix, New Orleans, Sep 26	Freight matrix, New Orleans, Oct 26
Kwinana	Freight matrix, Kwinana, Jul 26	Freight matrix, Kwinana, Aug 26	Freight matrix, Kwinana, Sep 26	Freight matrix, Kwinana, Oct 26

=

Indicative CFR parityCalculated output

Origin	Jul 26	Aug 26	Sep 26	Oct 26
Constanta	270.00	271.00Model low	274.00Model low	278.00Model low
Novorossiysk	269.00Model low	274.00	278.00	281.00
New Orleans	283.00	286.00	289.00	292.00
Kwinana	324.00	325.00	326.00	329.00

Answer explainedWhy does the result move?Open or close the model FAQ

In plain English

Read down a month to compare origins in space. Read across an origin to compare the delivered curve through time. The parity comparison assumes comparable quality and broadly similar finance, documents, risk and margin; it is not an automatic sourcing decision.

The rule behind itCFR(origin, month) = FOB(origin, month) + freight(origin, month)