# Costs and Freight (CFR)

*Last updated: 2026-06-23*

> Under CFR (Cost and Freight), the seller arranges the freight contract and pays transportation costs to the named port of destination – but cargo insurance is not included.

Under CFR (Cost and Freight), the seller arranges the freight contract and pays transportation costs to the named port of destination – but cargo insurance is not included. Risk passes to the buyer at the port of shipment the moment the goods are loaded on board, well before they reach their destination. This split between cost responsibility and risk transfer is CFR's defining characteristic: the seller pays for the vessel, but bears no liability for loss or damage during the sea voyage. Buyers must therefore arrange their own cargo insurance. CFR is restricted to sea freight and inland waterway transport; for containerized shipments, CPT is the more appropriate choice, as risk passes at the point of handover to the first carrier. CFR forms part of the Incoterms rules published by the International Chamber of Commerce (ICC).

**Source:** [https://iccwbo.org/business-solutions/incoterms-rules/](https://iccwbo.org/business-solutions/incoterms-rules/)

## Quick Facts

| Property | Value |
|---|---|
| Term | Costs and Freight (CFR) |
| Language | EN |
| Word count | 136 |
| Last updated | 2026-06-23 |
| Source | https://iccwbo.org/business-solutions/incoterms-rules/ |

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