GlossaryEN1 min readUpdated: Jun 23, 2026
Costs and Freight (CFR)
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.
Quick Answer
Last updated: Published:
Source: https://iccwbo.org/business-solutions/incoterms-rules/
Category
Incoterms 2020 Simulator: Who bears costs & risk?
Reading time
1 min
Words
136
Mentioned in
–
Definition & Explanation
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).
Next steps
Matching tools and partners
Related Terms
You might also be interested in these terms
⚖️ ICC Incoterms 2020
Incoterms 2020 Simulator: Who bears costs & risk?
Analyze all 11 Incoterms 2020: cost matrix, risk timeline, insurance gap detector and customs responsibility – free, no login required.
Logistics knowledge straight to your inbox
Free · No password · Never a paywall. Weekly top news and facts from logistics.
Community Questions & Answers
Share your knowledge, ask follow-up questions, or add practical insights to this page. Every contribution is moderated before publication.
No community answers yet. Be the first.