# CFR, Cost and Freight (Incoterms 2020)

CFR (Cost and Freight) means the seller pays the sea freight to the named port of destination, but risk passes to the buyer as soon as the goods are on board at the port of shipment. The seller has no duty to insure. It is for sea and inland waterway only.

- Transport: sea and inland waterway only
- Delivery and risk transfer: On board the vessel at the port of shipment, although the seller pays freight to the destination port.
- Seller's costs run to: Arrived at destination

## Responsibilities

| Job | Who |
|---|---|
| Export clearance | Seller |
| Loading at origin | Seller |
| Main carriage | Seller |
| Insurance | No obligation |
| Unloading at destination | Buyer, unless in seller's freight contract |
| Import clearance and duties | Buyer |

## Common mistakes

- **Two critical points** The cost point (destination port) and the risk point (on board at origin) are different places. The buyer carries the risk of the whole sea voyage on a ship the seller chose, so the buyer should insure.
- **Destination charges** Unloading and terminal charges at destination are the buyer's unless the seller's freight contract includes them, which causes frequent disputes.
- **Containers** As with FOB, CPT is the better rule for containerised goods.

## CFR or CIF?

CIF is CFR plus insurance arranged by the seller for the buyer's benefit.

Incoterms® is a trademark of the International Chamber of Commerce; CartonMath is not affiliated with the ICC.

## FAQ

**What does CFR mean?**
CFR (Cost and Freight) means the seller pays the sea freight to the named port of destination, but risk passes to the buyer as soon as the goods are on board at the port of shipment. The seller has no duty to insure. It is for sea and inland waterway only.

**When does risk pass under CFR?**
On board the vessel at the port of shipment, although the seller pays freight to the destination port.

**Who pays the main freight under CFR?**
The seller arranges and pays the main carriage.

**Who pays import duties under CFR?**
The buyer clears the goods for import and pays any duties and taxes under CFR.

**Can CFR be used for container shipments?**
CFR is a sea and inland waterway rule. For containers, the ICC recommends CPT instead, because containers are handed over at a terminal before loading.

Source page: https://cartonmath.com/incoterms/cfr/
Updated: 2026-10-06
Publisher: CartonMath (https://cartonmath.com)