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CFR incoterms 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 should be used instead.
BUYER’S OBLIGATIONS UNDER CFR
Delivery of goods and documents required
Packaging and wrapping
Inland transport in the country of origin
Customs at origin
SELLER’S OBLIGATIONS UNDER CFR
Payment of the goods
Customs on arrival
Inland transport at the destination country
Payment of fees