What is Incoterm CFR?
CFR – Cost and Freight – requires the seller to pay sea freight to destination while risk passes when goods are loaded at the departure port.
Incoterms® 2020 allocate delivery costs, risks and selected customs responsibilities between seller and buyer. They do not determine ownership or payment and must be used with a precisely named place.
| Aspect | What to know |
|---|---|
| Core meaning | Sea and inland waterway only |
| Operational use | Seller pays freight |
| Control point | Risk passes at departure |
| Key caution | Insurance not included |
How does it work in practice?
The buyer bears voyage risk and arranges insurance even though the seller contracts the main freight.
The rule, named place and edition are recorded in the sales contract, order confirmation and invoice. The transport booking, insurance and customs instructions are then aligned with that allocation.
Decisions, exceptions and reference numbers should be recorded in the transport order or relevant system. This creates a clear audit trail of the information available and the actions taken by each party.
Key points to check
- Sea and inland waterway only
- Seller pays freight
- Risk passes at departure
- Insurance not included
Always check current contract terms and official guidance as the correct application may vary by vehicle, goods, route, port, customer role or selected customs procedure.
Why does it matter for urgent transport?
For urgent shipments, the Incoterm identifies who arranges carriage and formalities, but it does not replace practical instructions such as addresses, contacts, time windows and document references.
Good preparation prevents a fast vehicle movement from being delayed by missing documents, unsuitable equipment, incorrect classification or denied access at the collection, border or delivery point.
Frequently asked questions
What is Incoterm CFR used for?
CFR – Cost and Freight – requires the seller to pay sea freight to destination while risk passes when goods are loaded at the departure port. The buyer bears voyage risk and arranges insurance even though the seller contracts the main freight.
Is Incoterm CFR mandatory?
It applies only when incorporated into the contract, preferably in the format '[rule] [named place], Incoterms® 2020'.
What should be checked before transport?
Confirm the parties, goods, documents, reference validity and requirements along the actual route. Where the rule is regulatory, use the latest guidance from the competent UK authority.
Sources: ICC – Incoterms® rules and GOV.UK – International trade contracts and Incoterms. Editorial review: 13 August 2026.