As we already know, not all Incoterms are multi-purpose; some are exclusive to transport by ship. The last article published was dedicated to one of them (FOB), and in today's post we will explain another, CFR (Cost and Freight).
A small difference between CFR and other terms is that, in this case, the transfer of responsibility does not coincide with the transfer of payment obligations. That is, if this term is used in an international sale operation, the seller assumes responsibility for loss or damage to the goods until they are loaded at the port of origin, although they are responsible for arranging and paying for the international transport to the agreed port. Because of this, it is advisable for the buyer to take out insurance for international transit.
The CFR term is followed by the agreed destination port. 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 loaded at the Port of Barcelona; inland transport in the country of origin to the Port of Shenzhen, cargo handling up to loading and international transport. The buyer will take care of the insurance of the goods, of their handling at the Port of Barcelona and of inland transport in the destination country. Each of them will carry out the corresponding customs formalities.
We hope it has been useful.
Below is a list of the posts:
– EXW
– FCA
– FAS
– FOB
– CFR
– CIF
– CPT
– CIP
– DAT
– DAP
– DDP
If you would like to import from China, please do not hesitate to contact us with no obligation.