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CFR Cost and Freight.

Seller pays sea freight to the destination port, but risk passes on board at the port of shipment.

Where risk passes

CFR named port of destination
SellerCarrierAlongsideOn boardImport portDestinationUnloaded
Risk passesOn board the vessel at the port of shipment
Transport modeSea and inland waterway only
Main carriage booked bySeller
Cargo insuranceNot required; buyer insures if he wants to
Export clearanceSeller
Import clearance and dutiesBuyer
Seller pays6 of 13 cost steps

Who pays what under CFR

CostPaid by
Loading at originSeller
Export customs declarationSeller
Carriage to port of exportSeller
Unloading of truck in port of exportSeller
Loading on vessel/airplane in port of exportSeller
Carriage (sea/air) to port of importSeller
InsuranceBuyer
Unloading in port of importBuyer
Loading on truck in port of importBuyer
Carriage to place of destinationBuyer
Import customs clearanceBuyer
Import duties and taxesBuyer
Unloading at destinationBuyer

Sources: ICC, Incoterms® 2020; cost split as given inWikipedia, Incoterms (section "Allocations of costs"). Duties, fit and pitfalls below are Navo's own summary, not ICC text. Incoterms® is a trademark of the ICC.

When CFR fits

Bulk and break-bulk sales where the seller books the ocean freight to the destination port.

What to watch

  • Risk passes on board at the port of shipment, not at the destination port.
  • For containers ICC advises CPT instead.
  • Destination terminal charges are split by the carriage contract and port custom; agree them up front.
  • Shipping under CFR? Compare freight rates and check sailings.