Sea and inland waterway
CFR
Cost and Freight
The seller pays sea freight to the named port of destination, but risk passes once the goods are on board at the port of shipment.
WHO DOES WHAT — 8 STAGES
SELLER
Contract and pay for sea freight to the named port of destination
Load the goods on board
Complete export clearance
BUYER
Bear risk from loading on board
Pay destination charges not included in the freight
Complete import clearance and pay duties
KEY FACTS
Risk, cost and paperwork at a glance.
RISK TRANSFERS
When the goods are on board the vessel at the port of shipment.
COST TRANSFERS
The seller pays freight to the named port of destination.
INSURANCE
No obligation for either party.
EXPORT CLEARANCE
Seller
IMPORT CLEARANCE
Buyer
IN PRACTICE
When to use it, and when not to
As with CPT, cost and risk transfer at different ports. The buyer usually arranges insurance for the sea voyage.
Educational summary of the Incoterms® 2020 rules, not legal advice. Incoterms® is a trademark of the International Chamber of Commerce; check the official ICC text and take professional advice for contracts.
GUIDE
Incoterms® 2020, explained in full
ALL RULES
The other ten rules
AGREED THE TERMS?