The CFR Incoterm or “Cost and Freight” is an incoterm that is exclusive to maritime shipping. It states that the seller is not only responsible for delivering the goods to the port specified by the buyer, but also bears the transportation costs of the goods to the destination port.
However, insurance costs are the responsibility of the buyer. Unlike many other Incoterms, the risk transfer point differs from the cost transfer point. Under the CFR Incoterm, the risk is transferred when the goods are loaded on board the shipping vessel at origin.
The CFR Incoterm should be used in situations where the seller has direct access to the vessel.
Delivery of goods and documents required
Packaging and wrapping
Inland transport in the country of origin
Customs at origin
Payment of the goods
Customs on arrival
Inland transport at the destination country
Payment of fees