Incoterms CFR: Cost and Freight

Named Place Requirement: Port of Destination

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.

 

CFR Shipping | Incoterms Obligations

Seller’s Obligations

o   Goods, commercial invoice and documentation

o   Export packaging and marking

o   Export licenses and customs formalities

o   Pre-carriage and delivery

o   Loading charges

o   Delivery at named port of destination

o   Proof of delivery

o   Cost of pre-shipment inspection

Buyer’s Obligations

o   Payment for goods as specified in sales contract

o   Risk starting with onboard delivery

o   Discharge and onward carriage

o   Import formalities and duties

o   Cost of pre-shipment inspection (for import clearance)