Incoterms and shipping
CFR (Cost and Freight)
Definition
The seller pays sea freight to the named destination port, but risk passes when the goods are on board at the port of shipment.
CFR at a glance
- Transport
- Sea and inland waterway only
- Risk passes
- When the goods are on board the vessel at the port of shipment, even though the seller pays the freight
- Insurance
- No obligation
Under CFR the seller clears the goods for export, delivers them on board the vessel and pays the freight to the named port of destination. Risk passes to the buyer once the goods are on board at the port of shipment, so the buyer usually insures the voyage.
CFR is a sea and inland waterway rule. The equivalent rule for any mode of transport, including containers, is CPT.
Related terms
- CIF (Cost, Insurance and Freight)Like CFR, with the seller also buying minimum cargo insurance for the voyage.
- FOB (Free on Board)The seller delivers the goods on board the buyer's vessel at the named port of shipment, cleared for export.
- CPT (Carriage Paid To)The seller pays carriage to the named destination, but risk passes when the goods are handed to the first carrier.