In plain English
The seller books the ship and pays the ocean freight, but the buyer carries the risk of loss during the voyage because risk transfers at loading. The buyer should therefore arrange its own cargo insurance.
The seller clears the goods for export; the buyer clears them for import and pays duties.
Why it matters when you ship
CFR splits cost and risk at different points, which surprises buyers who assume that because the seller paid the freight the seller is still responsible. If the cargo is lost at sea, the loss is the buyer’s unless the buyer insured it.
If the seller should also buy insurance for the buyer, CIF is the matching rule.
Example
A seller agrees “CFR Rotterdam”. The seller pays the freight to Rotterdam. If the ship is damaged on the way, the buyer bears the loss unless the buyer bought insurance.
Related terms
CFR (Cost and Freight): common questions
Who pays the freight on CFR?
The seller pays the ocean freight to the named destination port. The buyer pays unloading and everything after, plus import duties.
Cite this page
Cite as: Transportli, “CFR: Cost and Freight Meaning”, https://transportli.com/glossary/cfr/, updated November 11, 2026.
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