CFR— Cost and Freight(Tiền hàng và cước)
CFR (Cost and Freight) is a maritime rule with two separate critical points: the seller pays freight to the destination port, but risk has already passed to the buyer when the goods were loaded at the loading port. Damage at sea is therefore the buyer's loss, even though the seller paid the freight.
Cost, risk and clearance at a glance
Delivery & risk transfer
Delivery and the transfer of risk take place at the loading port when the goods go on board, not at destination. The buyer should therefore insure the sea leg itself unless it is prepared to carry that risk uninsured.
Cost split
The seller pays through to the destination port: origin costs, export clearance and ocean freight. Discharge costs at destination follow the carriage contract the seller signed: if the freight includes discharge, the seller bears it and cannot recover it from the buyer unless agreed otherwise. The buyer pays insurance (if any), import clearance and the inland leg.
Insurance
Neither party is obliged to insure. Whichever party bears the transit risk should consider buying cover for that leg.
Watch out for
- “The seller pays freight to destination” must not be read as “the seller bears risk to destination”; confusing the two is the most common misreading of the C group. Risk always passes at the loading port.
- Neither party is obliged to insure. Since the buyer carries the sea-leg risk, it should buy cover itself, or switch to CIF so that the seller must provide minimum cover.
- For containers, use CPT instead of CFR (the box is handed to the carrier at the yard before loading).
Converting a CFR price to Vietnamese customs value
Legal basis: Circular 39/2015/TT-BTC, amended by 60/2019/TT-BTC.
"Incoterms" is a registered trademark of ICC. This page is HSCodeVN's own plain-language summary, for reference only; the authoritative rules are ICC's Incoterms® 2020 publication.