Definition
The seller pays ocean freight to the destination port, but risk passes to the buyer once goods are on board.
Under CFR the seller arranges and pays for carriage to the named port of discharge, yet risk transfers to the buyer at the port of loading the moment the cargo is on board — so the buyer bears in-transit loss even though the seller booked the freight.
CFR differs from CIF only in that the seller is not obliged to buy marine insurance. Because risk has already passed, a prudent buyer arranges their own cover. CFR is for sea transport only.
Related terms
CIF (Cost, Insurance and Freight)
The seller pays freight and minimum marine insurance to the destination port; risk still passes on loading.
FOB (Free On Board)
The seller delivers, cleared for export, once the goods are on board the vessel at the named port.
CPT (Carriage Paid To)
The seller pays carriage to the named destination, but risk passes when goods reach the first carrier.
Port of Discharge (POD)
The port where cargo is unloaded from the vessel, ending the main ocean leg.
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