Under CFR terms (short for “Cost and Freight”), the seller is required to clear the goods for export, deliver them onboard the ship at the port of departure, and pay for transport of the goods to the named port of destination. The risk passes from seller to buyer when the seller delivers the goods onboard the ship. The buyer is responsible for paying all additional transport costs from the port of destination, including import clearance and duties.

Risk and cost transfer from seller to buyer at different points.

Seller’s Obligations

• Goods, commercial invoice and documentation.
• Export packaging and marking / Export licenses and customs formalities.
• Pre-carriage and delivery / Loading charges.
• Delivery onboard vessel at named port of shipment.
• Proof of delivery.
• Cost of pre-shipment inspection.

Buyer’s Obligations

• Payment for goods as specified in sales contract.
• Main carriage.
• Discharge and onward carriage.
• Import formalities and duties.
• Cost of pre-shipment inspection (for import clearance).