Incoterms CFR - Cost and Freight (2024)

Named Place Requirement: Port of Destination

Applies to: Incoterms CFR - Cost and Freight (1) Sea and inland waterway only

Incoterms CFR - Cost and Freight (2)Click to enlarge

What is CFR in shipping?

Under CFR terms (short for “Cost and Freight”), the seller is required to clear the goods for export, deliver them onboard the ship at the port of departure, and pay for transport of the goods to the named port of destination.

The risk passes from seller to buyer when the seller delivers the goods onboard the ship.

The buyer is responsible for paying all additional transport costs from the port of destination, including import clearance and duties.

Only use CFR for ocean or inland waterway transport.

If the freight is containerized and to be delivered to a terminal only, use CPT instead.

Incoterms CFR - Cost and Freight (3)Risk and cost transfer from seller to buyer at different points.

CFR Shipping | Incoterms Obligations

Seller’s Obligations

  • Goods, commercial invoice and documentation
  • Export packaging and marking
  • Export licenses and customs formalities
  • Pre-carriage and delivery
  • Loading charges
  • Delivery at named port of destination
  • Proof of delivery
  • Cost of pre-shipment inspection

Buyer’s Obligations

  • Payment for goods as specified in sales contract
  • Risk starting with onboard delivery
  • Discharge and onward carriage
  • Import formalities and duties
  • Cost of pre-shipment inspection (for import clearance)
Incoterms CFR  - Cost and Freight (2024)
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