Cost and Freight (CFR) is an International Commercial Terms (Incoterms) rule used exclusively for sea and inland waterway transport in international trade. Under CFR, the seller arranges and pays all costs necessary to deliver goods to the named port of destination, including freight charges. However, risk of loss or damage transfers to the buyer once the goods are loaded on board the vessel at the port of shipment. This term creates a clear separation between cost responsibility (seller pays to destination) and risk transfer (buyer assumes at origin port), which is a critical distinction in maritime commerce that requires careful consideration of insurance needs.
Key Characteristics
- Mode of Transport Restriction
- Seller’s Cost Obligations
- Risk Transfer Point
- Buyer’s Responsibilities
