Incoterms® 2020 · C: main carriage paid

CFR Cost and Freight

The seller pays ocean freight to the destination port, but risk passes when the goods are on board in the origin port.

Delivery point: On board the vessel at the port of shipment
Risk passes: When the goods are on board the vessel, in the origin port
Transport mode: Sea and inland waterway only
Export clearance: Seller
Import clearance: Buyer
Insurance: Not required of either party

Responsibility matrix

Costs and risk, stage by stage

Under CFR the seller books and pays the ocean freight to the named port of destination. Delivery and risk transfer still happen at origin, when the goods are loaded on board. Freight paid by the seller does not mean the seller carries the risk at sea.

Seller pays
Buyer pays
Depends on the contract of carriage or the named place
Risk passes to the buyer

01 Loading at seller's premises Seller pays
02 Pre-carriage to export terminal Seller pays
03 Export clearance Seller pays
04 Origin terminal and loading on board Seller pays
05 Main carriage Seller pays
06 Destination terminal charges Depends on the contract of carriage or the named place
07 Import clearance, duties and taxes Buyer pays
08 Carriage to named destination Buyer pays
09 Unloading at destination Buyer pays

Who does what

The seller must

Contract and pay for carriage to the named port of destination
Load the goods on board and clear them for export
Provide the bill of lading or other usual transport document promptly
Notify the buyer once the goods are on board
Pay unloading at destination only if it is in its contract of carriage

The buyer must

Bear the risk once the goods are on board
Insure the goods if it wants cover; it is not required
Pay destination terminal and unloading costs not in the freight
Clear the goods for import and pay duties and taxes
Receive the goods from the carrier at the destination port

When to use it

Bulk and break-bulk sea cargo where the seller gets good freight rates
You have your own cargo insurance

Be careful when

Container cargo: use CPT
You need control over the shipping line and transit time

Tip for buying from Vietnam

Ask for the name of the shipping line and the free time at destination with every CFR quote. Low freight with short free time often costs more in detention charges.

How to write it

CFR Port Klang, Malaysia, Incoterms® 2020

Compare with

This guide summarises the Incoterms® 2020 rules in plain language for planning. It is not the official text. Incoterms® and the Incoterms® 2020 logo are trademarks of the International Chamber of Commerce. For the full rules, see ICC publication No. 723E.

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