Cost and Freight (CFR)

Cost and Freight (CFR) is an international trade term that defines the point at which the seller of goods transfers the costs and risks of delivering the goods to the buyer. Under CFR, the seller is responsible for paying for the cost of transporting the goods to the named port of destination, but the buyer is responsible for paying for any costs incurred after the goods have been delivered to the port.

CFR is a relatively simple and straightforward trade term, and it is often used for goods that are shipped by sea. However, it is important to note that CFR does not include any insurance costs, so the buyer is responsible for purchasing their own insurance coverage.

Here is a more detailed explanation of the CFR trade term:

• The seller is responsible for paying for the cost of transporting the goods to the named port of destination. This includes the cost of loading the goods onto the ship, the cost of freight, and any other costs associated with transporting the goods to the port.
• The seller is also responsible for obtaining any necessary import permits or licenses.
• The buyer is responsible for paying for any costs incurred after the goods have been delivered to the port. This includes the cost of unloading the goods from the ship, the cost of customs clearance, and any other costs associated with bringing the goods into the country.
• The buyer is also responsible for purchasing their own insurance coverage for the goods.

CFR is a common trade term, and it is often used for goods that are shipped by sea. However, it is important to understand the responsibilities of both the buyer and the seller under CFR before entering into a contract.

Here are some additional things to keep in mind about CFR:

• CFR is a "named port of destination" term, which means that the seller is only responsible for delivering the goods to the port that is specified in the contract. The buyer is responsible for arranging for the goods to be transported from the port to their final destination.
• CFR is a "free on board" term, which means that the seller is responsible for loading the goods onto the ship. The buyer is responsible for unloading the goods from the ship at the port of destination.
• CFR is a "cost, insurance, and freight" term, which means that the seller is responsible for paying for the cost of transporting the goods to the port of destination, as well as the cost of insurance. The buyer is responsible for paying for any costs incurred after the goods have been delivered to the port.

CFR is a relatively simple and straightforward trade term, but it is important to understand the responsibilities of both the buyer and the seller before entering into a contract.