CFR stands for 운임 및 운반비, and it is also commonly referred to as C&F. It is one of the most widely used Incoterms in international trade, especially for ocean freight shipments from China.
If your shipment is based on CFR terms, the process is straightforward:
You only need to appoint a reliable freight forwarder, and your supplier will deliver the goods to the designated warehouse. From there, the logistics provider manages the shipment, while you are responsible for costs after arrival at the destination port.
Additional Service:
BRF 물류 offers free warehousing across major cities in China. Simply ask your supplier to send the cargo to our warehouse, and we will handle the rest — from booking and export clearance to final shipping arrangements.
What is CFR?
CFR (Cost and Freight) is an international trade term under Incoterms rules, where the seller is responsible for paying the cost and freight to transport goods to the destination port.
Under CFR terms:
- Seller is responsible for:
- 수출 통관
- Inland transportation to port
- Loading and ocean freight
- Buyer is responsible for:
- Unloading at destination
- Import clearance
- Duties and taxes
- 최종 납품
⚠️ Important:
Risk transfers from seller to buyer once the goods are loaded on board the vessel at the port of origin, even though the seller pays the freight.
What are Incoterms?
Incoterms (International Commercial Terms) are globally recognized rules published by the International Chamber of Commerce (ICC).
They define:
- Responsibilities between buyer and seller
- Cost allocation
- Risk transfer points
The latest version is 인코텀스 2020, which includes 11 standardized trade terms, including CFR.
CFR Cost Structure
The basic CFR pricing formula is:
- CFR = FOB + 해상 운송
Where:
- FOB (Free on Board): cost up to loading at origin port
- Ocean Freight: shipping cost to destination port
Alternative formula:
- CFR = CIF × [1 – (1 + Insurance Rate) × Insurance Rate]
참고:
CFR does 보험은 포함되지 않습니다, so buyers should consider purchasing cargo insurance separately.
CFR vs Other Incoterms
CFR vs FOB
- FOB: Buyer pays ocean freight
- CFR: Seller pays ocean freight
- Same: Risk transfers when goods are on board
CFR vs CIF
- CFR: No insurance included
- CIF: Insurance included
- Same risk transfer point
CFR vs EXW
- EXW: Buyer takes almost all responsibility
- CFR: Seller handles export and main transport
Who Pays What Under CFR?
| 비용 항목 | 판매자 | 구매자 |
|---|---|---|
| 공장 직접 수령 | ✔ | |
| 수출 통관 | ✔ | |
| 해상 운송 | ✔ | |
| 보험 | ✔ (optional) | |
| 목적지 요금 | ✔ | |
| Import duties & taxes | ✔ | |
| 최종 납품 | ✔ |
Does CFR Include Duties?
No.
Under CFR terms, import duties, taxes, and customs clearance fees are the buyer’s responsibility.
Risk Transfer in CFR
👉 Risk transfers when goods are loaded onto the vessel at the origin port.
This means:
- Seller pays freight
- Buyer assumes risk once goods are on board
Therefore, cargo insurance is highly recommended.
Can CFR Be Used for Air Freight?
No.
CFR is only applicable to:
- 해상 운송
- Inland waterway transport
For air shipments, CPT 또는 CIP should be used instead.
Is CFR Suitable for Letters of Credit (L/C)?
Yes.
CFR is commonly used in L/C transactions because:
- Documentation is clear (Bill of Lading, Invoice, etc.)
- Responsibilities are well defined
- Bank compliance is straightforward
Can CFR Be Used for Container Shipping?
Yes.
CFR is widely used for:
- 전체 컨테이너 적재(FCL)
- 소량 화물(LCL)
However, in some containerized shipments, FOB or FCA may be preferred to reduce risk disputes.
How to Optimize CFR Shipping Costs?
To reduce shipping costs:
- Optimize packaging to save space
- Book early to avoid peak season surcharges
- Choose a reliable freight forwarder
- Plan efficient shipping routes
Working with a professional logistics provider like BRF 물류 helps ensure better rates and stable space availability.
왜 BRF 로지스틱스를 선택해야 할까요?
BRF 물류 다음과 같이 규정하고 있다:
- Free warehousing across China
- One-stop logistics solutions (booking, customs, shipping)
- 탄탄한 통신사 파트너십
- Professional operations team
- Tailored shipping solutions
Whether you are a first-time importer or a high-volume buyer, we ensure efficient and reliable global logistics support.
CFR is a practical and cost-effective Incoterm, ideal for:
- Buyers with some import experience
- Shipments where sellers handle main freight
- Ocean freight cargo
However, understanding risk transfer and insurance responsibilities is essential.
👉 Partner with BRF 물류 to simplify your global shipping and build a more efficient supply chain.
