CFR
CFR (Cost and Freight) is a maritime-only Incoterm where the seller pays for: the cost of the goods and the freight to the destination port. Unlike CIF, the seller does not arrange insurance — the buyer must obtain their own marine cargo insurance.
As with CIF and FOB, risk transfers at the load port when goods are loaded on board, not at destination. CFR is commonly used for bulk and project cargo where the buyer prefers to control insurance terms.
CFR is CIF minus the insurance — the seller pays freight to the destination port, but the buyer must arrange their own marine cover. As with CIF and FOB, risk passes at the load port, so a buyer on CFR who forgets to insure is exposed from the moment the goods are loaded.
(on board)
(buyer insures)
Under CFR Rotterdam, the seller pays ocean freight to Rotterdam, but the buyer must buy their own insurance and bears the risk from the load port onward. If they do not insure and the container is lost at sea, the loss is uncovered.
What is the difference between CFR and CIF?
Both have the seller pay cost and freight to destination with risk passing at origin. Under CIF the seller also buys marine insurance for the buyer; under CFR the buyer arranges their own.
Who insures the cargo under CFR?
The buyer. The seller pays only cost and freight — arranging insurance is the buyer's responsibility, even though risk passed to them at the load port.