CFR: Cost and Freight
By Mohamed Omer, Chairman & Chief Executive Officer, Mooventory Global · Sea & inland waterway
The seller pays sea freight to the destination port, but risk passes once goods are on board at origin.
Where risk transfers
When goods are on board the vessel at the port of loading.
Seller pays
- Export clearance
- Loading
- Sea freight to the destination port
Buyer pays
- Insurance (strongly advised)
- Destination port charges
- Import duties and clearance
When to use CFR
Bulk commodities where the seller has strong freight contracts.
Watch out for
The buyer carries voyage risk without having chosen the carrier. Sellers may book cheap freight with high destination charges.
CFR for Africa trade
Check terminal handling and delivery-order charges at Mombasa, Dar es Salaam or Lagos before accepting CFR prices.
Other Incoterms
Sources
International Chamber of Commerce (ICC), Incoterms® 2020 rules. Incoterms® 2020 remain the current ICC edition in force.