CFR (Cost and Freight)

CFR (Cost and Freight) is one of the international trade terms (Incoterms), meaning that the seller is responsible for delivering the goods to the named port of destination and paying the freight, but the risk transfers to the buyer once the goods pass the ship's rail at the port of shipment. This term applies to sea or inland waterway transport. Usage scenarios: It is commonly used when the seller has stable shipping schedule resources and the buyer wishes to arrange insurance itself and bear the transport risk. Precautions: The seller must promptly send a shipment notice to the buyer so that the buyer can insure; if the seller fails to notify, the buyer may be unable to insure in time and bear losses. The difference from CIF is that under CFR the seller is not responsible for arranging insurance, while under CIF the seller must pay the insurance premium. Compared with FOB, under CFR the seller bears the main freight, while under FOB the buyer is responsible for the freight. In addition, the risk transfer point under CFR is the same as under FOB, both at the ship's rail at the port of shipment, but the cost division is different. Foreign trade practitioners need to clearly specify in the contract the port of destination, shipment period, and notification obligations to avoid disputes arising from insurance or notification delays.