Freight Forwarder Insights

COST FREIGHT INCOTERM （CFR）

by:

Huin International Logistics

In:

Shipping dictionary

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Created:

25 Jan 2024

What is Cost Freight (CFR)?

CFR is one of the 11 International Commercial Terms (Incoterms) used in trade,

where the seller is required to pay for the transportation of goods until the final port of import.

CFR terms are only applicable to ocean freight shipments.

Point of Risk Transfer!

The risk transfers to the buyer when the goods are loaded on the main ship in the export country. At that point, the buyer becomes liable for the safety of the goods.

When should you choose CFR?

CFR is best for ocean shipments with agricultural and chemical products, or general bulk goods where the seller has the possibility to transport and load goods at the

port of export.

For containerized shipments or other modes of transportation, consider CPT terms instead.

Cost allocation. Who pays for what under CFR:

What is the difference between CFR and CIF?

The only difference is insurance!

Under CIF, the seller is legally obligated to buy insurance for the goods at 110% of their value.

Under CFR, there is no legal obligation to buy insurance but the buyer is welcome to do so if they wish.