CFR — Cost and Freight

The seller pays the sea freight to the named port of destination, but the risk passes to the buyer once the goods are on board at the port of shipment.

Transport: Sea only
Main carriage: The seller books and pays the sea freight to the named port of destination.
Risk passes: When the goods are on board the vessel at the port of shipment.
Insurance: Not required

Who pays and who carries the risk

Seller Buyer

Export clearance

Loading at seller

Transport to terminal

Origin terminal & loading

Main carriage

Destination terminal & unloading

Import clearance & duties

Delivery to buyer

Unloading at buyer

CostsRisk

Risk passes to buyer

Export clearanceSeller
Loading at sellerSeller
Transport to terminalSeller
Origin terminal & loadingSeller
Risk passes to buyer
Main carriageSeller
Destination terminal & unloadingBuyer
Import clearance & dutiesBuyer
Delivery to buyerBuyer
Unloading at buyerBuyer

Destination terminal charges are the buyer's unless they are included in the seller's carriage contract.

Seller

Clear the goods for export
Contract and pay sea freight to the port of destination
Load the goods on board and send the buyer the transport document

Buyer

Bear risk once the goods are on board
Pay destination charges not included in the freight
Clear the goods for import and pay duties
Insure the cargo if it wants cover

When to use it

Bulk and breakbulk sea shipments where the seller controls the freight.

Watch out

For containers use CPT — the same split of cost and risk, with the handover at the terminal.

Not sure which term to agree?

Tell us the route and the cargo — we'll suggest the term that fits and quote the freight for it.

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Other Incoterms® rules

EXWEx Works FCAFree Carrier CPTCarriage Paid To CIPCarriage and Insurance Paid To DAPDelivered at Place DPUDelivered at Place Unloaded DDPDelivered Duty Paid FASFree Alongside Ship FOBFree On Board CIFCost, Insurance and Freight Incoterms® guide

Incoterms® is a registered trademark of the International Chamber of Commerce. This guide is Cargo 4S's own summary for everyday use; for the complete rules see the official ICC Incoterms® 2020 publication.

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