As we already know, not all Incoterms are multi-purpose, but there are some that are exclusive to transport by ship. The last published article was dedicated to one of them ( FOB) and in today’s post we will explain another one, the CFR (Cost and Freight).
A small difference in the CFR with respect to the other terms is that in this case the transfer of liability does not coincide with the transfer of payment obligations. In other words, if this term is used in an international sale and purchase transaction, the seller assumes responsibility for loss or damage to the goods until they are shipped at the port of origin, although he will be responsible for contracting and paying for international transportation to the agreed port. Because of this, it is advisable for the buyer to take out insurance for international transit.
The term CFR is followed by the named port of destination. For example, if we import goods from Shenzhen, China, under CFR Port of Barcelona conditions, it means that the seller assumes the costs of the operation until the goods are shipped at the port of Barcelona; inland transportation in the country of origin to the port of Shenzhen, cargo handling until shipment and international transportation. The buyer will be responsible for the insurance of the goods, handling at the port of Barcelona and inland transport in the destination country. Each of them will be in charge of the corresponding customs formalities.
We hope you found it helpful.
Below is a list of the entries:
– EXW
– FCA
– FAS
– FOB
– CFR
– CIF
– CPT
– IPC
– DAT
– DAP
– DDP
If you want to import from China, do not hesitate to contact us without obligation.
