CFR (Cost and Freight) is a sea-transport Incoterm under which the seller pays the cost and freight to bring goods to the destination port, but risk passes to the buyer once the goods are loaded on board the vessel.
CFR (Cost and Freight), sometimes written as C&F, is an Incoterm for sea and inland waterway transport. Under CFR, the seller pays the cost of the goods and the ocean freight to bring them to the named destination port, but risk passes to the buyer once the goods are loaded on board the vessel at the origin port.
Under CFR, the seller clears the goods for export, loads them on board the vessel and pays freight to the destination port. From the moment the goods are on board, however, the buyer bears the risk of loss or damage during the sea voyage. CFR pricing is quoted as, for example, "CFR Jebel Ali (Incoterms 2020)".
As with CPT, the cost and risk points differ. The seller pays freight to the destination port (cost point), but risk transfers to the buyer at loading (risk point). Because the seller does not insure the goods under CFR, buyers are strongly advised to arrange their own marine cargo insurance for the voyage.
The seller handles export clearance, loads the goods on board, and pays freight to the destination port, providing the Bill of Lading. The buyer bears risk from loading, arranges insurance, and handles import clearance and duties at destination.
CFR is identical to CIF except that CIF adds seller-arranged marine insurance. Compared with FOB, where the buyer arranges the main carriage, CFR shifts the freight arrangement to the seller while keeping the risk transfer point at loading. For containers, CPT (and its insured version CIP) is generally preferred over the sea-only rules.
CFR suits sea shipments where the seller can secure competitive ocean freight and the buyer is comfortable arranging insurance. It gives the buyer a landed-to-port freight cost while leaving insurance flexible.
CFR is a classic sea-freight Incoterm in which the seller pays cost and freight to the destination port, but risk passes to the buyer at loading. Recognising this gap — and arranging cargo insurance to cover the voyage — is essential for buyers. If seller-arranged insurance is required, CIF is the equivalent rule. CFR applies only to sea transport; for containers, consider CPT or CIP.