Where delivery happens
When the goods are on board the vessel at the port of shipment.
The seller
- Export clearance
- Loading and ocean freight to the named destination port
The buyer
- Risk from loading on board
- Insurance (if wanted)
- Destination charges not in the freight contract, import clearance, duty and GST/VAT
When risk passes
Passes on board at the port of shipment.
When to use CFR
Sea cargo where the seller books freight and the buyer insures.
Watch out
As with CPT, the seller pays freight to destination but the buyer carries the transit risk. Destination terminal handling charges are a common dispute; agree who pays them.
Example
CFR Melbourne: the seller pays freight to Melbourne; cargo damaged at sea is the buyer's loss to claim.
How it appears on the invoice
Write the three-letter code, the named place and the rules version, for example CFR Melbourne (Incoterms® 2020). The full name is not needed on the document. In Vendara Trade Documents you pick CFR – Cost and Freight from the list and the invoice prints just CFR with your named place.
Frequently asked questions
What does CFR mean?
CFR stands for Cost and Freight (Incoterms® 2020). The seller pays ocean freight to the destination port, but the risk passes once the goods are on board at origin.
Where does risk pass under CFR?
Passes on board at the port of shipment.
Who pays import duty and GST under CFR?
The buyer pays import clearance, duty and import GST or VAT.
When should I use CFR?
Sea cargo where the seller books freight and the buyer insures.
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