In Incoterm CFR the seller delivers the goods on board of a ship in the port of shipment, but he also manages and pays the cost of freight to the port of destination. Therefore, the point where the risk of transport is transmitted (port of shipment) is different from the point to which the seller bears the costs of transport (port of destination). The terminal costs and export clearance in the port of shipment are borne by the seller.
The only difference between Incoterms CFR and CIF is that in CFR the seller is not obliged to hire an insurance transport from the port of shipment to the port of destination.
CFR is a sea transport Incoterm used mainly for general cargo and large volumes of goods. When the goods are transported in containers and the place of delivery is the port of destination, Incoterms 2010 rules advised to use CPT instead of CFR, because the containers are usually delivered at the terminals of the ports, that is, before being placed on board of the ships.
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