Cost and Freight
The seller pays the cost and freight to the destination port, but risk passes to the buyer once the goods are on board at origin. Sea and inland waterway only.
When to use it
CFR suits a seller who wants to control and quote freight to the buyer without also taking on insurance, useful when the buyer has their own cargo insurance arrangement. Like FOB, it is written for sea and inland waterway transport, not containerised multimodal shipments.
The common mistake
Assuming the seller carries risk all the way to the destination port because they are paying the freight. Risk actually passes at origin, once goods are on board; a loss in transit is the buyer's problem even though the seller booked and paid for the voyage.
Risk transfers
after Loading onto main carriage, from seller to buyer.
See the full responsibility matrix
Compare all 11 Incoterms 2020 rules side by side, interactively.
Incoterms is a registered trademark of the International Chamber of Commerce (ICC). This is an educational summary, not the official rules. For the binding text, see the ICC Incoterms 2020 publication.
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