Incoterms 2020
CFR, Cost and Freight
The seller pays the freight to the destination port, but risk passes when the goods are loaded at origin. No insurance is required, which is the gap to watch.
- Group
- C
- Mode
- Sea and inland waterway only
CFR is the sea equivalent of CPT. The seller contracts and pays for the ocean carriage to the named destination port, but risk transfers to the buyer as soon as the goods are on board at the port of shipment. The two points are usually weeks and thousands of kilometres apart.
Crucially, CFR requires no insurance from either party. If the vessel loses containers overboard, the buyer bears the loss on goods that the seller arranged the transport for. Unless the buyer takes out their own marine cargo policy, that exposure is simply uncovered. CIF adds insurance, although only at the minimum level.
The seller is responsible for
- Deliver the goods on board at the port of shipment
- Clear the goods for export
- Contract and pay for carriage to the named destination port
- Provide the bill of lading and commercial documents
The buyer is responsible for
- Bear all risk from the moment the goods are on board at origin
- Pay unloading and terminal charges at destination unless in the freight contract
- Arrange their own insurance, as the rule requires none
- Handle import clearance, duty and taxes
Risk transfers
When the goods are on board at the port of shipment.
Costs transfer
At the named destination port, which the seller pays to reach.
Best used for
Bulk cargo where the seller has better freight rates and the buyer insures separately.
Watch out for
No insurance is required. The buyer carries an uninsured risk across the entire ocean leg unless they arrange cover themselves.
Related services
Tell us what you need to move.
Send the supplier city or port of loading, the volume and weight, and the date the goods are ready. We will come back with a landed cost and a realistic transit time, usually within one working day.