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Customs brokerage and international shipping terms guidance

Incoterms® 2020

CFR - Cost and Freight

Under CFR, the seller delivers the goods on board the vessel and pays the cost of carriage to the named destination port. Risk transfers to the buyer when the goods are on board at the port of shipment—not when they arrive at the destination.

Sea / inland waterway · Named port of destination

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CFR at a glance

Under CFR, the seller delivers the goods on board the vessel and pays the cost of carriage to the named destination port. Risk transfers to the buyer when the goods are on board at the port of shipment—not when they arrive at the destination.

Sea or inland waterway onlyInsurance required by the rule: No

Shipment

Named location
Named port of destination
Delivery point
When goods are on board the vessel at the port of shipment
Risk transfer
When goods are on board the vessel at the port of shipment

Responsibilities

Main carriage
Seller arranges and pays
Export clearance
Seller
Import clearance
Buyer
Insurance
CFR does not require the seller to contract for cargo insurance (compare CIF).

Contract

Common comparison
Compare with CIFCIF adds a seller insurance obligation while keeping similar origin risk transfer.

Illustrative notation: CFR Port of Rotterdam, Netherlands, Incoterms® 2020. Customize and copy below ->

Responsibility journey

Delivery point
When goods are on board the vessel at the port of shipment
Risk transfer
When goods are on board the vessel at the port of shipment
Seller sideBuyer sideDelivery + risk transfer

  1. Seller / exporter

    Cost
    Seller

  2. Origin pickup

    Cost
    Seller

  3. Export clearance

    Cost
    Seller
    Export
    Seller

  4. Origin terminal

    Cost
    Seller

  5. On board vessel

    Cost
    Seller
    Handoff
    Delivery + risk transfer

  6. Ocean / waterway

    Cost
    Seller

  7. Destination terminal

    Cost
    Buyer

  8. Import clearance

    Cost
    Buyer
    Import
    Buyer

  9. Final delivery

    Cost
    Buyer

  10. Buyer / importer

    Cost
    Buyer
Text alternative for CFR: Seller-paid cost through Ocean / waterway. Delivery occurs at On board vessel. Risk transfer at On board vessel. Insurance: CFR does not require the seller to contract for cargo insurance (compare CIF). Export clearance: Seller. Import clearance: Buyer. Main carriage: Seller.

Who pays what under CFR?

CFR is limited to sea or inland waterway. The seller pays ocean freight to a named port of destination, but delivery and risk transfer occur on board at origin. CFR does not require the seller to buy cargo insurance.

Seller does

  • Deliver goods on board at the port of shipment
  • Contract and pay carriage to the named port of destination
  • Complete export clearance

Buyer does

  • Bear risk during the ocean voyage after goods are on board at origin
  • Handle import clearance
  • Arrange insurance if desired
  • Arrange unloading/on-carriage beyond the destination port as needed

Not determined by the CFR rule alone

  • Seller cargo insurance obligation
  • Risk transfer at the destination port

When to use CFR

When CFR fits

  • Sea/inland-waterway shipments where the seller should book freight to a named destination port
  • Buyers comfortable carrying voyage risk while the seller pays freight

When to use CFR with caution

  • Multimodal or non-water moves—compare CPT
  • Shipments where insurance must be seller-provided—compare CIF

CFR shipment example

A seller ships break-bulk equipment CFR Port of Rotterdam, Netherlands, Incoterms® 2020. The seller places the goods on board at the origin port and pays ocean freight to Rotterdam. Risk transfers when the goods are on board at origin. The buyer carries voyage risk, handles import clearance in the Netherlands, and arranges onward delivery. Port names in this example are illustrative.

Common mistakes

  • Assuming risk transfers at the destination port because the seller paid freight
  • Writing “port or place” instead of a named port of destination
  • Using CFR when cargo insurance should be the seller’s obligation (CIF)

How do you write CFR in a contract?

Include the acronym, the exact named location, and the edition.

Contract notation builder

Build an illustrative line with the acronym, named place or port, and Incoterms® 2020. Parties must agree the exact location; this does not create a contract.

CFR Port of Rotterdam, Netherlands, Incoterms® 2020

Edition is fixed to Incoterms® 2020. Catalog example: CFR Port of Rotterdam, Netherlands, Incoterms® 2020

Does CFR include insurance?

CFR does not require the seller to contract for cargo insurance (compare CIF).

CFR compared with related terms

Use these comparisons when the shipment mode, handoff point, or insurance need does not match CFR.

  • CFR vs. CIF

    CIF adds a seller insurance obligation while keeping similar origin risk transfer.

    CIF adds a seller insurance obligation while keeping similar origin risk transfer.

    Open CIF details ->

  • CFR vs. FOB

    FOB also transfers risk on board at origin, but the buyer pays main carriage.

    FOB also transfers risk on board at origin, but the buyer pays main carriage.

    Open FOB details ->

  • CFR vs. CPT

    CPT can be used for multimodal moves and a named place of destination, not only a waterway port.

    CPT can be used for multimodal moves and a named place of destination, not only a waterway port.

    Open CPT details ->

View all Incoterms(R) 2020 terms in the comparison matrix

Frequently asked questions

When does risk transfer under CFR?

Under CFR Incoterms® 2020, risk transfers when the goods are on board the vessel at the port of shipment, not when they arrive at the named destination port.

Who pays freight under CFR?

The seller arranges and pays carriage to the named port of destination under CFR Incoterms® 2020.

Does CFR include insurance?

No. CFR does not require the seller to contract for cargo insurance. Compare CIF when seller-provided insurance is required.

How do you write CFR in a contract?

Use a named port of destination and the edition, for example: CFR Port of Rotterdam, Netherlands, Incoterms® 2020. Replace the example port with the parties’ agreed port.

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Unsure which shipping term fits your movement?

Talk with a Crane trade or customs specialist about transport mode, handoff points, documentation, and clearance responsibilities. This guidance is educational and is not legal advice; the parties remain responsible for selecting contractual terms.

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Last reviewed July 30, 2026. Edition reference: Incoterms® 2020 (not a new calendar-year edition).