Our glossary simplifies common industry terms in freight and logistics into clear, easy-to-understand explanations.
Cost and Freight (CFR) is a common term in international trade, meaning the seller bears the freight costs of transporting goods from the port of shipment to the port of destination, while insurance is the buyer's responsibility. While the seller pays the freight, the risk of the goods transfers to the buyer upon loading. CFR terms are typically used for large-volume ocean freight trades, such as those involving minerals, grain, or energy products. Buyers are required to purchase their own insurance to mitigate risk. For businesses, choosing CFR requires a clear understanding of risk and cost allocation to avoid misunderstandings and disputes. CFR offers buyers flexibility in choosing insurance options, but also increases their management responsibilities.
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