Part of the Comprehensive Incoterms Guide
CFR In Plain English
CFR (Cost and Feight) is a tricky incoterm. Read the details carefully. Not recommended.
Where Is The Named Place For Handing Over Responsibility From The Seller To The Buyer?
The seller is liable and responsible for all the steps in their country up to the point the goods are loaded on board the vessel and is also responsible – but not liable – for the main carriage. Once the goods are loaded onto the vessel, the responsibility shifts to the buyer. The buyer becomes liable for the main carriage and assumes responsibility for the shipment’s safety and compliance until it reaches the final destination.
What Does The ICC Say?
Not recommended for containerized freight. Designed for bulk and break bulk cargo.
Is This A Good Choice?
As for FOB, this incoterm is suitable for FCL, but not for LCL and Air Freight (refer FOB).
Also, importers who don’t have a representative at the port should be wary using this term, unless they are sure that the carrier’s rates include terminal handling charges. If not, your seller’s forwarder will use a 3rd party agent to manage import clearance, duties, and terminal charges. Many importers get caught with inflated charges and dubious fees that they are effectively unable to challenge.
CFR Tips And Tricks
Refer to CPT.
