Navigating global trade means understanding who handles what in your shipment—and that’s where Incoterms come in. One commonly used term for sea freight is CFR (Cost and Freight).

While similar to FOB, CFR shifts a bit more responsibility to the seller—but only up to a point. If you’re an importer looking to simplify freight arrangements while still managing risk, CFR might be a great fit.

Let’s unpack it.

What Does CFR Mean?

CFR (Cost and Freight) is an Incoterm exclusive to sea and inland waterway transport. Under CFR, the seller pays for the cost of transporting goods to the destination port, but risk transfers to the buyer once the goods are loaded onto the ship at the origin port.

That means:

• Seller pays for ocean freight 

• Buyer assumes risk as soon as the goods are on board 

• Insurance is NOT included—that’s the buyer’s responsibility under CFR 

Key Responsibilities Under CFR

Here’s how things are divided between the two parties:

Seller’s Responsibilities:

• Pack and prepare the goods 

• Handle export customs clearance 

• Deliver goods to port and load them onto the vessel 

• Pay for freight to the named destination port 

Buyer’s Responsibilities: 

• Bear the risk once goods are on board 

• Arrange and pay for cargo insurance (optional) 

• Handle import customs, duties, and inland delivery 

Risk and cost are not transferred at the same time—a common point of confusion.

When Should You Use CFR?

CFR works well when the seller has better access to freight providers or gets competitive shipping rates, but the buyer still wants control after port arrival.

Use CFR when:

• Shipping via bulk cargo or FCL by sea 

• Buyer is comfortable taking over at destination port 

• Seller can secure affordable and reliable freight rates 

CFR is not suitable for containerized cargo delivered via inland terminals. In such cases, CPT (Carriage Paid To) is a better fit.

Pros and Cons of CFR

Let’s weigh the pros and cons:

Advantages for Buyers: 

• No need to negotiate freight from origin port 

• Simplified procurement with one cost covering goods + freight 

• Competitive pricing if seller has strong shipping ties 

Challenges for Buyers: 

• Bear risk during ocean transit 

• Must arrange insurance independently 

• Responsible for unloading, customs, and inland transport 

Common Misconceptions About CFR

“CFR includes insurance.”

→ False. Only CIF (Cost, Insurance, Freight) includes insurance. CFR does not.

“The seller is responsible until goods reach the destination port.”

→ Not exactly. The cost is the seller’s duty until arrival, but risk transfers once goods are loaded at the origin port.

“CFR is the same as FOB.”

→ They’re close, but not the same. Under FOB, the buyer pays for and arranges freight. Under CFR, the seller pays for freight.

How CFR Compares to Other Incoterms  

How SailOn Logistics Supports CFR Shipments

CFR gives sellers control over the freight leg while allowing buyers to focus on port clearance and beyond. That’s where SailOn Logistics becomes your logistics partner.

Here’s how we help streamline CFR shipping:

• Competitive sea freight solutions through trusted carrier networks 

• Coordination with sellers for timely cargo loading 

• Export customs support and documentation assistance 

• Shipment tracking and visibility throughout the journey 

• Optional cargo insurance solutions for risk management 

Whether you’re a buyer or seller, we ensure the CFR journey is smooth from origin to destination.

Final Thoughts

CFR can simplify your shipping process, but only if you understand its structure: seller pays freight, buyer carries the risk. It’s ideal for businesses that want pricing predictability but have the know-how to manage destination port logistics.

Need help navigating CFR or comparing it to CIF, FOB, or FCA? Let SailOn Logistics guide your international trade decisions.

Contact us today for end-to-end shipping support that makes global trade feel local.