Shipping Terms Glossary
Shipping Terms Glossary
Cost Freight (CFR)

Cost Freight (CFR)

CFR terms are only applicable to ocean freight shipments.

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.

Bookairfreight - what is CFR?

🚨 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.

Simple Scenario Time:

Business Owner (Buyer): Angela is sourcing chemicals from China to her warehouse in Germany.

Supplier (Seller): A coal manufacturer located in China.

Agreed Term: CFR Port of Antwerp.

Seller’s duties: In charge of arranging export clearance and paying for transportation till Port of Antwerp, Germany.

Buyer’s duties: Incharge of all import clearance, arranging and paying for transportation from the Port of Antwerp to the warehouse (including loading and unloading charges).

Point of Risk Transfer: When the goods are loaded on to the ship in China, the risk of goods is transferred to the buyer.

Cost allocation. Who pays for what under CFR:

Cost allocation - who should pay 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 .

Cristian Ungureanu

Logistics nerd and resident marketing guy of Bookairfreight. I love writing content that simplifies old-fashioned industry processes and provides solid, accurate information you can base your decisions on. Outside of logistics, I enjoy nature, hanging out with friends, electronic music and spirituality.

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