CFR INCOTERM (Cost and Freight)

Using CFR incoterm

CFR or “Cost and Freight” is exclusive to shipping and states that the seller is responsible for not only delivering the goods to the port specified by the buyer, but also bears journey cost of the goods to the destination port. However, insurance costs are the responsibility of the buyer. Unlike other Incoterms, here the risk transfer is not at the same point as the cost transfer, with CFR the risk transfer is made at the time that the goods have been loaded on board the ship at origin.

If the point of risk exchange is not specified when the cargo crosses the ship’s rails, then CPT  incoterm should be used instead.

Seller’s obligations under CFR

  • Delivery of goods and documents required
  • Packaging and wrapping
  • Inland transport in the country of origin
  • Customs at origin
  • Exit charge
  • International freight

Buyer’s obligations under CFR

  • Payment of the goods
  • Insurance
  • Arrival expenditures
  • Customs on arrival
  • Inland transport at the destination country
  • Payment of fees

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