CFR
Cost and Freight
Under CFR (Incoterms® 2020), the seller pays the sea freight to the named port of destination. But the risk passes to the buyer earlier, when the goods are loaded on the ship at the port of shipment.
In plain words
CFR has two important points. The cost point is the destination port: the seller pays the transport to there. The risk point is the loading port: once the goods are on board, any loss or damage at sea is the buyer's risk, even though the seller paid the freight.
Under CFR, the seller does not have to buy insurance. The buyer should arrange cargo insurance from the moment of loading. CFR is only for sea and inland waterway transport; for containers, CPT is often a better match. The buyer pays unloading charges and import clearance at destination, unless the contract says otherwise.
Example from real shipping
A Turkish exporter sells steel pipes “CFR Alexandria, Incoterms® 2020”. The exporter books and pays the ship from Iskenderun. During the voyage, some pipes are damaged in a storm. The risk was already with the buyer, so the buyer claims from its own cargo insurance.
Related terms
- CIFCIF (Incoterms® 2020) is like CFR, but the seller must also buy cargo insurance for the buyer. The risk still passes to the buyer when the goods are loaded on the ship at the port of shipment.
- FOBUnder FOB (Incoterms® 2020), the seller clears the goods for export and loads them on board the ship chosen by the buyer, at the named port of shipment. The risk passes to the buyer when the goods are on board.
- Freight Collect / Freight PrepaidThese terms show who pays the main freight and where. “Freight prepaid” means it is paid at origin, usually by the shipper. “Freight collect” means it is paid at destination, usually by the consignee.
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Request a QuoteThis glossary is general information, not legal or customs advice. Rules, fees, and practice can differ by carrier, port, and country.