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




What is CFR?

Cost and Freight, or CFR is an international legal trade term which specifies that the seller is required to clear the goods for export, deliver them onboard the ship at the port of origin, and pay for the transportation of these goods to the port of destination. The seller must also provide the buyer with the documentation, necessary for pickup of the goods from the carrier at the destination port. CFR is a term used strictly for cargo transported by sea or inland waterways.

According to CFR Incoterms, when is risk transferred to the buyer from the seller?

The risk or responsibility is transferred to the buyer from the seller when the goods are delivered onboard the ship. However, the seller is still responsible for paying all additional costs of transportation from the destination port, as well as import clearance and duty charges.  

When should CFR be used, as opposed to CIF and CPT? 

  • If the buyer requires the seller to purchase insurance for the goods in transport, the Incoterm CIF would apply.  
  • According to CFR terms, the seller doesn’t have to purchase insurance for the goods. CFR is also only applied to non-containerized ocean shipments and inland waterway transport.  
  • CPT would apply to all other modes of transport for similar terms and goods.  




Tags: incoterms

Need more support? If you did not find what you were looking for, contact us for further help!