Incoterm · Sea and inland waterway only
CFRCost and Freight
CFR is CIF without the insurance, and it's older than both of them. If you like the seller booking the ship but want to buy your own cover, this is the term. It also has a naming problem that has caused more arguments than the rule itself.
In March 2026 the Strait of Hormuz closed and a lot of Indian cargo bound for the Gulf never got there. A forwarder posted that four of his 40-foot boxes had been "dropped in Nhava Sheva" on 10 March and billed ground rent from the first day, with no free time. An Indian exporter wrote that he'd been hit with a war-risk surcharge on a container that had "ALREADY SAILED" (r/logistics, Apr 2026 (opens in a new tab), LinkedIn, Indian exporter, May 2026 (opens in a new tab)). That spring is the best lesson we know in what CFR does and doesn't promise, so we'll use it all the way through. One caveat - the rules quoted are Incoterms 2020, in force since 1 January 2020, and as of 28 September 2026 the ICC has published no newer edition.
What CFR Actually Means
Cost and Freight. The seller delivers the goods on board the vessel at the Indian port, cleared for export, and contracts and pays for the freight to the named port of destination. Risk passes to you on board in India. Nobody is obliged to insure.
It's sea and inland waterway only, for goods delivered on board a ship. For containers the ICC prefers its any-mode twin, CPT.
Who does what
| Task | Seller | Buyer |
|---|---|---|
| Export clearance in India | Yes | |
| Loading at origin | Yes | |
| Main carriage (sea freight to the named port) | Yes, contracted and paid | |
| Insurance | Nobody is obliged | Your choice, and we'd take it |
| Unloading at destination | Depends on the seller's carriage contract. Usually you | Usually yes |
| Import clearance | Yes | |
| Duties and taxes at destination | Yes |
Where The Risk Passes, And Why Hormuz Proved It
On board at the Indian port of shipment. The seller has paid to get the goods to your port, but from the moment they're on board they travel at your risk.
Now go back to March 2026. The seller's job under CFR was done the moment the box went on board at Nhava Sheva. When the carrier then dropped Gulf cargo back at Indian ports, the storage, the demurrage and the war-risk charges fell on whoever owned the cargo, and by the rule that's you. The forwarder in our story said it plainly: "They didnt give me the standard free time and billed me since day one." And the seller's freight? Already earned, because the seller contracted for carriage, not for arrival.
The exporter's surcharge on an already-sailed box is the other half. Under CFR the freight is the seller's cost, so a line that bills a surcharge after booking is billing the seller. Many Indian exporters on fixed prices swallowed it, and others sent buyers price-increase letters mid-contract. Neither side had a clause for it. That's the gap to close.
How To Write It
CFR Jebel Ali, Incoterms 2020. Name the destination port and, if it matters, the terminal. Ask which Indian port the goods will ship from, because under CFR the seller decides that, and it changes the transit and the route.
Then add two clauses the rule doesn't give you. A freight-adjustment clause that says who carries a surcharge billed after booking. And a diversion clause that says who carries storage, demurrage and reroute costs if the carrier discharges short of the named port. Neither would have stopped Hormuz, and both would have stopped the argument.
When CFR Fits And When It Doesn't
CFR fits buyers who want the seller to arrange the sea leg but prefer to insure through their own annual cargo policy. Many established importers already hold one, and Clauses A cover on a known policy usually beats the minimum cover a seller buys per shipment under CIF.
It fits bulk and break-bulk, such as stone, castings and bagged commodities. For containers, the ICC's guidance is the same as for FOB and CIF: use the any-mode equivalent, which here is CPT.
It doesn't fit buyers who need to control the forwarder. Under CFR the seller picks the line and the origin agent, and the destination agent comes with them. When the agent chain breaks, as it did in 2026, you're negotiating with people you didn't hire.
The Name Problem
"C&F", "CNF" and "C and F" are trade slang for the same idea, and none of them is an Incoterms rule. The early rules called it C&F. Since 1990 it's been CFR. We still see C&F on Indian quotes, usually on a template that's older than the person sending it.
It isn't a red flag about the supplier, just about the document. Ask the supplier to confirm "CFR, Incoterms 2020" in writing, because a contract that names no rule and no edition leaves both of you guessing, and the guessing always happens at the worst moment.
What CFR Means For Your Landed Cost
Goods plus freight in one number, with insurance and everything after the ship on you. Get the freight shown separately on the invoice, then use the landed cost calculator. Ask for the destination agent's tariff before you accept, because under CFR the seller's freight usually stops at the ship's rail and the destination charges are yours.
Customs value splits the same way as CIF. The UK and the EU add transport and insurance to the border, so the CFR price plus your insurance is close to the base. The US, New Zealand and Australia value on a basis that excludes international freight, so you need the freight figure to deduct. The detail is on the CIF page and on working out the real import duty.
Some India to Europe services are back on Suez and some aren't. Ask which routing the seller's booking uses, and put a transit expectation in the PO. The current routing picture is on sea freight routes.
Ready to act
Need hands-on help?
If a supplier will only quote C&F and you want the freight, the routing and the destination charges checked before you sign, SourcingSync can do that from the Indian side.
CFR vs Its Neighbours
- CFR vs CIF. Identical except that under CIF the seller must also buy minimum insurance for you. Your own Clauses A policy usually wins.
- CFR vs FOB. Same risk point. Under FOB you book the freight and pick the line, so the agent chain is yours.
- CFR vs CPT. CPT is the any-mode version. Risk passes at handover to the first carrier, which for a container is the depot, not the ship.
- CFR vs DAP. Under DAP the seller carries the risk all the way to your named place, which is the term that would have put the Hormuz diversion on the seller.
What The Spring Of 2026 Taught
The buyers who lost money that spring mostly signed a normal CFR contract. The rule did exactly what it says: the seller paid for a voyage and the buyer owned the risk from the deck. What they were missing was two lines of contract - one for surcharges, one for diversion - and cargo insurance of their own that covered war risk. CFR is a fine term if you add those. Without them it's a bet that nothing happens between India and your port, and in 2026 that bet lost.
Frequently asked questions
Is C&F the same as CFR?
In intent, yes. In law, only CFR is an Incoterms 2020 rule. Have the contract say CFR and the edition.
Who insures the goods under CFR?
Nobody has to. You should, from the moment they're on board in India, because that's when the risk became yours. Check that your policy covers war risk.
Who pays if the carrier discharges my container short of the named port?
The rule doesn't say. The risk is yours from on board, so by default storage and reroute charges reach the cargo owner. Agree a diversion clause before you sign.
Who pays unloading at my port?
It depends on what the seller's freight contract includes. Ask for the discharge terms in writing before the booking.
Why would I take CFR instead of FOB?
If the seller gets better freight rates than you can, or you don't yet have a forwarder, CFR saves you the booking. You pay for that in control.