Cost and Freight
CFRThe seller pays ocean freight to destination, but risk passes when goods are on board at origin.
Last reviewed: 30 September 2026
Professional definition
The seller pays ocean freight to destination, but risk passes when goods are on board at origin. The named place must be stated precisely and the parties should identify the Incoterms® 2020 version.
Example
A Turkish exporter pays freight to Southampton, but the UK buyer takes risk when tiles are loaded in İzmir.
Where it is used
Sea / inland waterway only. Name the destination port, while also agreeing the origin delivery point where risk transfers.
CFR responsibilities
Seller
- Clear and load goods for export
- Contract and pay freight to destination port
- Provide the transport document
Buyer
- Bear risk from on-board delivery at origin
- Arrange insurance
- Clear imports and receive goods at destination
- Delivery point
- Name the destination port, while also agreeing the origin delivery point where risk transfers.
- Risk transfer
- Transfers when goods are on board the vessel at the shipment port, not at the paid destination port.
- Cost responsibilities
- Seller pays export, loading aboard and freight to destination port. Buyer pays insurance, import and costs outside the freight contract.
- Insurance
- Neither party must insure; buyer should cover the ocean risk.
- Customs
- Export: Seller. Import: Buyer. Seller pays export duties/taxes; buyer pays import duty, import VAT and clearance charges.
Common mistakes and things to remember
Incoterms® allocate delivery, risk, cost and customs tasks; they do not determine title, payment, product compliance or every contract obligation.
Source
Use the linked authority and applicable national guidance for current requirements.