What is CFR – Cost and Freight (named port of destination) ?

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CFR

What is CFR?

Cost and Freight or CFR, in an international trade label that describes an arrangement where the seller is responsible for clearing the goods for export, delivery onboard the vessel at the port of origin, and paying for the main carriage to the port of destination. 

According to CFR Incoterms, what is each party responsible for?

In addition to export requirements, delivery to the port, and carriage to the destination, the seller is also responsible for providing necessary documentation for the buyer to pick up the goods at the destination.

Once the goods are on board the vessel, risk transfers to the buyer, however, the buyer is not financially responsible until the goods are unloaded from the ship at the destination. The buyer is also responsible for all additional transport costs from the destination port as well as import clearance and duties. 

When is CFR used?

CFR is used only for non-containerized ocean or inland waterway transportation

Note, the seller is not responsible to purchase insurance under these Incoterms. If the buyer requires that the seller purchase insurance for the goods, 

CIF is a more appropriate contract.

Tags: incoterms

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