Incoterms CFR

Incoterms CFR: Understanding Cost and Freight

The Incoterms CFR, or "Cost and Freight," are international commercial terms defined by the International Chamber of Commerce (ICC). They specify that the seller is responsible for the costs and freight necessary to transport the goods to the designated port of arrival. However, the risk of loss or damage is transferred to the buyer as soon as the goods are loaded on board the ship.

Seller's Responsibilities

• Sea Freight: The seller must arrange and pay for sea transport to the agreed port of arrival.
• Export Customs Formalities: They must handle customs formalities in the country of export.
• Transport Documents: Provide the necessary documents for the buyer to take possession of the goods upon arrival.

Buyer's Responsibilities

• Risks: The buyer assumes all risks once the goods are on board the ship.
• Import Customs Formalities: They must manage customs formalities in the country of import.
• Post-Arrival Costs: All costs after arrival at the port, including unloading, are their responsibility.

Practical Advice

• Insurance: Although the seller is not required to take out insurance, it is advisable for the buyer to do so to cover risks during sea transport.
• Choice of Carrier: The seller chooses the carrier, but it is crucial for the buyer to ensure that the carrier is reliable.

The Incoterms CFR are often used for bulk or non-containerized sea transport. They offer a clear distribution of costs and risks but require good coordination between the parties to avoid misunderstandings. For more information on Incoterms, visit the International Chamber of Commerce.