GlossaryEN1 min readUpdated: Jun 26, 2026
CFR (Cost and Freight)
CFR (Cost and Freight) is a sea and inland waterway Incoterm in which the seller pays the ocean freight to the named destination port but transfers risk to the buyer as soon as the goods are loaded on board 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 sea and inland waterway Incoterm in which the seller pays the ocean freight to the named destination port but transfers risk to the buyer as soon as the goods are loaded on board at the port of shipment. Cost obligation and risk exposure therefore split at the same point – the vessel's side at the loading port – yet the financial flows diverge: the seller settles the freight invoice while the buyer bears any loss or damage during transit. Unlike CIF, the seller has no obligation to arrange cargo insurance; the buyer manages that exposure independently. CFR is suited to bulk commodities and standardised goods, and should not be used for containerised shipments, where CPT is the appropriate alternative.
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⚖️ ICC Incoterms 2020
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