Cost and Freight
Sea & inland waterwayThe seller pays the cost and freight to bring the goods to the destination port, but risk transfers to the buyer once the goods are on board at the origin port.
Written as: CFR [named port of destination]
Cost and Freight
Seller pays freight, but risk passes at origin
Hover a stage to see who is responsible.
Cost and risk split here
With CFR, the seller pays for carriage all the way to destination, but risk passes to the buyer at Main carriage (freight). The buyer should insure the goods from that point.
| Stage | Who pays | Who's at risk |
|---|---|---|
| Export packaging | Seller | Seller |
| Loading at origin | Seller | Seller |
| Inland to origin port | Seller | Seller |
| Export customs | Seller | Seller |
| Origin terminal charges | Seller | Seller |
| Loading on main carrier | Seller | Seller |
| Main carriage (freight) | Seller | Buyer |
| Destination terminal charges | Buyer | Buyer |
| Import customs & duty | Buyer | Buyer |
| Inland to destination | Buyer | Buyer |
| Unloading at destination | Buyer | Buyer |
Seller's responsibilities
- Clear for export and load on board
- Pay freight to the destination port
Buyer's responsibilities
- Bear risk from on board at the origin port
- Pay import, duties, and onward transport
Risk transfer
Under CFR, the risk of loss or damage passes from the seller to the buyer at Main carriage (freight).
With CFR, the seller pays for carriage all the way to destination, but risk passes to the buyer at Main carriage (freight). The buyer should insure the goods from that point.
Insurance
Not required (buyer may arrange)
When to use it
Sea freight where the seller arranges the main carriage but the buyer accepts transit risk.
Watch out
Cost and risk split: the seller pays to destination, yet the buyer carries risk during the voyage. Arrange insurance accordingly.
Frequently asked
- Does CFR include insurance?
- No. CFR covers cost and freight only. If you want the seller to insure the cargo, use CIF.