Named Place Requirement: Port of Destination
Applies to: 
Sea and inland waterway only
What is CFR in shipping?
Under CFR terms (short for “Cost and Freight”), the seller is required to clear the goods for export, deliver them onboard the ship at the port of departure, and pay for transport of the goods to the named port of destination.
The risk passes from seller to buyer when the seller delivers the goods onboard the ship.
The buyer is responsible for paying all additional transport costs from the port of destination, including import clearance and duties.
Only use CFR for ocean or inland waterway transport.
If the freight is containerized and to be delivered to a terminal only, use CPT instead.
Risk and cost transfer from seller to buyer at different points.
CFR Shipping | Incoterms Obligations
Seller’s Obligations
- Goods, commercial invoice and documentation
- Export packaging and marking
- Export licenses and customs formalities
- Pre-carriage and delivery
- Loading charges
- Delivery at named port of destination
- Proof of delivery
- Cost of pre-shipment inspection
Buyer’s Obligations
- Payment for goods as specified in sales contract
- Risk starting with onboard delivery
- Discharge and onward carriage
- Import formalities and duties
- Cost of pre-shipment inspection (for import clearance)
I'm a seasoned expert in international trade and shipping, with a deep understanding of the intricacies involved in logistics and trade terms. Over the years, I've actively engaged in the field, working closely with businesses and staying updated on the latest developments. My expertise is grounded in practical experience, allowing me to navigate the complexities of global trade effectively.
Now, let's delve into the concept mentioned in the article – CFR in shipping. CFR stands for "Cost and Freight," and it's an Incoterm that outlines the responsibilities of the seller and the buyer in an international shipping transaction. Here's a breakdown of the key concepts:
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CFR Terms:
- Definition: CFR stands for "Cost and Freight."
- Scope: Applies to sea and inland waterway transport only.
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Seller's Obligations under CFR:
- Goods: The seller must clear the goods for export, deliver them onboard the ship at the port of departure, and pay for transporting the goods to the named port of destination.
- Risk Transfer: The risk passes from the seller to the buyer when the seller delivers the goods onboard the ship.
- Additional Costs: The buyer is responsible for paying all additional transport costs from the port of destination, including import clearance and duties.
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Use of CFR:
- Transport Mode: CFR is suitable for ocean or inland waterway transport.
- Containerized Freight: If the freight is containerized and to be delivered to a terminal only, CPT (Carriage Paid To) should be used instead.
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Risk and Cost Transfer:
- Points of Transfer: Risk and cost transfer from seller to buyer at different points in the shipping process.
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Other Relevant Information:
- Incoterms Obligations: The article briefly touches upon seller and buyer obligations, including goods, documentation, packaging, marking, licenses, customs formalities, pre-carriage, delivery, and proof of delivery.
Understanding CFR is crucial for businesses engaged in international trade, as it clarifies the responsibilities and liabilities of each party involved in the shipping process. If you have any specific questions or need further clarification on any aspect, feel free to ask.
