GlossaryEN1 min readUpdated: Jun 22, 2026
CFR (Cost and Freight)
CFR (Cost and Freight) is a maritime Incoterm: the seller pays freight to the named port of destination, but risk of loss or damage passes to the buyer the moment goods are loaded on board the vessel at the port of shipment.
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Source: https://iccwbo.org/business-solutions/incoterms-rules/
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Incoterms 2020 Simulator: Who bears costs & risk?
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Definition & Explanation
CFR (Cost and Freight) is a maritime Incoterm: the seller pays freight to the named port of destination, but risk of loss or damage passes to the buyer the moment goods are loaded on board the vessel at the port of shipment. That split between cost responsibility and risk transfer is CFR's defining characteristic – and a reliable source of disputes when buyers assume the seller remains liable until arrival. Unlike CIF (Cost, Insurance and Freight), CFR places no obligation on the seller to arrange cargo insurance; cover from the point of loading is entirely the buyer's responsibility. The term suits situations where the buyer holds an open cargo policy or prefers to manage insurance independently. For containerized or multimodal shipments, CPT is the more appropriate choice, as risk transfers there at handover to the first carrier rather than at the ship's rail.
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⚖️ ICC Incoterms 2020
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