Today we’re going to talk about CFR within the category of analysis of Incoterms meaning in commercial transactions between different countries.
In previous articles, we analyzed the differences between FOB, Ex Works and DDP, each with different nuances and significant details. However, this time we focus again on the import sector with sea transport, to study in greater depth, the meaning of the CFR incoterm.
CFR stands for Cost and Freight, which translated into Spanish would be something like “cost and freight”. In this case, we encounter a very important fact, which is that the payment responsibility is not directly related to the transportation of the merchandise.
In this case, we are facing a company that sells its merchandise and only assumes its damage or possible loss until the entire volume of product is boarded at the port of origin. However, international transportation costs are assumed.
With the CFR Incoterm, it is important for the buyer to purchase insurance aimed at covering any damage during international transit, given the significant risk of losing the merchandise.
When correctly interpreting this Incoterm, it is important to note that CFR will always be accompanied by the name of the specific destination port. Thus, the company purchasing the merchandise will be responsible for managing inland transportation in its destination country, handling, and insuring the merchandise.
As you can see, each Incoterm has a series of different details and obligations for the buyer and the seller. Hence, the extreme importance of knowing in detail the type of transaction to be carried out and having the support of an import specialist company like Bull Importer.
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