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Incoterms: Cost and Freight (CFR)

An in-depth guide to the incoterm; Cost and Freight...

 

What is Cost and Freight? (CFR)

Cost and Freight is one of the 11 incoterms used in in international shipping. In this ruling, the seller arranges and pays for the transport of goods up until the named port at destination.

 

What Transport Mode Can CFR Be Used With?

Cost and Freight is restricted to transport via sea or inland waterway.

 

How Does Cost and Freight Work?

In this ruling, the seller is required to arrange for the transport of goods, cleared for export (via sea) to a specific port at destination and provide the buyer with all the necessary documents to acquire the goods from the carrier.  

The risk transfers from seller to buyer once the goods have been loaded on board the vessel, however, the seller is not responsible for insuring the goods for the main carriage.

If this is sounding all too familiar with Free On Board (FOB) – don’t worry, there is a difference. The difference is based on who has responsibility for the various freight costs). If you use CFR the seller will deliver goods through to the destination port. If you use FOC the seller will only deliver the goods up to arrival at the departure port.

 

CFR Overview

  • The seller arranges transport up until the named port in the destination country.
  • Cost and Freight (CFR) differs to both Cost Insurance and Freight (CIF) and Free On Board (FOB) – Subtle differences, they are, but make sure you are clued up on each individual incoterm.
  • CFR is restricted to transport via sea and inland waterway. Do not use this incoterm for an air freight consignment.
  • The seller is responsible for completing the export customs clearance.

 

If you have any questions regarding the use of “Cost and Freight” or any other incoterm, please feel free to contact our team on 0113 250 1155 or email us at: sales@tudorfreight.com

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