Incoterms Rules
CFR — Cost and Freight
In the case of CFR (Cost and Freight), the seller pays for transportation to the destination port, but the risks transfer to the buyer at the moment of shipment — after the goods are loaded onto the vessel. This means that although the seller covers transport costs, the buyer bears responsibility for the goods during transit.
Who does what
| Transport | Sea and inland waterway |
|---|---|
| Export clearance | Seller |
| Import clearance | Buyer |
| Main carriage paid by | Seller |
| Insurance | Not required |
| Risk passes to the buyer | When the goods are loaded on board the vessel at the port of shipment |
When to use it
Common for bulk cargo when the seller books the sea freight to the destination port and the buyer arranges the insurance.
What to watch
Cost and risk split at different points: the seller pays freight to the destination port, but risk passes to the buyer once the goods are on board at the port of shipment. The buyer should insure from that moment.