Cost and Freight (CFR) is an Incoterm used only for sea and inland waterway transport. Under CFR, the seller pays the cost of carriage to the named destination port, but the seller does not buy insurance. Risk passes from seller to buyer once the goods are loaded onto the vessel at the origin port, even though the seller is still paying for the freight leg. It is essentially CIF (Cost, Insurance and Freight) minus the insurance obligation.
How it works
The seller clears the goods for export, delivers them onto the vessel, and pays freight to the agreed destination port (for example, “CFR Rotterdam”). From the moment the goods are on board, the buyer carries the risk of loss or damage in transit. If cargo is lost at sea, the buyer bears it even though the seller booked and paid the ocean freight. The buyer handles import clearance, duties, and onward transport from the destination port.
Why it matters
The split between who pays and who bears risk is the common source of disputes. Because CFR includes no insurance, a buyer who wants coverage has to arrange it separately, or negotiate CIF instead. For B2B sellers, quoting CFR means your price must include ocean freight but you should be clear that insurance is not part of the deal.
Applying it to Shopify quotes
If you sell wholesale across borders, the Incoterm belongs on the quote itself, not buried in an email. When you build a quote in a tool like ShopQuotes, state “CFR [port]” on the line items or notes so the buyer sees exactly what the freight-inclusive price covers and what it excludes. That prevents the buyer from assuming insurance is included. See the B2B quoting glossary for related terms like CIF, FOB, and DDP.