The seller must pay the costs and freight to take the goods to the port of destination. However, the risk is transferred to the buyer once the goods are loaded onto the ship (when using the ICC Incoterms® 2020 this is when passing the ship's railing). Insurance for the goods is NOT included. The distinction between the port of destination and the port of shipment is also important at CFR. Terminal Handling Charges (THC) are fees charged by the terminal operator. These costs may or may not be included by the carrier in their freight rates - the buyer should inquire if the CFR price includes THC, to avoid surprises. This term used to be called CNF (C&F). CFR is a maritime condition and may be less suitable for container transport.
The seller must deliver the goods on board the ship mentioned by the buyer at the agreed shipping port.
The risk of damage during transport is at the expense of the buyer from the passage of the ship railing in the shipping port.
The cost of transport to the agreed destination port is borne by the seller. The seller therefore concludes a transport contract for transport to the port of destination. When the goods are on the wharf of the destination port, further transport is at the expense of the buyer. Please note that the transfer of costs does not take place at the same time as the transition from risk to transport damage.
The seller must provide all customs formalities resulting from the export. His account is also the associated costs, duties and charges. For the account and risk of the purchaser, all customs formalities and the associated costs, duties and charges resulting from imports into the country of destination shall be accounted for.
Neither party is obliged to take out insurance for the goods.
Addition place of delivery
The delivery condition should always be added where the transfer of the goods takes place. At CFR, this is indicated with: ... named port of destination (... agreed destination port).