What is meaning of CFR in shipping term?
What is meaning of CFR in shipping term?
Cost and freight (CFR) is a trade term that requires the seller to transport goods by sea to a required port. Cost, insurance, and freight (CIF) is what a seller pays to cover the cost of shipping, as well as the insurance to protect against the potential damage of loss to a buyer’s order.
What is CFR incoterm agreement?
The CFR Incoterm or “Cost and Freight” is an Incoterm that is exclusive to ocean freight shipping. It states that the seller is not only responsible for delivering the goods to the port specified by the buyer, but also bears the transportation costs of the goods to the destination port.
Who pays duty on CFR Incoterms?
Along with FAS, FOB, and CIF, it’s one of four Incoterms that applies only to goods that move via sea and inland waterway. Under the CFR Incoterm, the seller pays for all the costs up to and including the ocean freight to a destination port of the buyer’s choosing.
Which is better CIF or CFR?
In short, it is the seller who must ensure the goods under CIF, while that responsibility lies with the buyer under CFR. Thus, in broad terms, CIF is generally the safer and more time-effective option for buyers, as it reduces insurance arrangement obligations.
How is CFR shipping calculated?
CFR Calculation
- CFR Price = FOB Price + Shipping.
- CFR Price = CIF Price X [1 – (1+ Insurance Premium) X Insurance Rate]
- FOB: is an initial that is mostly used in the shipping industry which stands for “free on board” or “freight on board”.
What is a CFR invoice?
Cost and Freight (CFR) means that the seller delivers when the goods pass the ship’s rail in the port of shipment.
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