CFR ,Cost and Freight, that is, cost plus freight. Cost plus freight, also known as the internal price of freight, was previously expressed by C&F in business, (some also used CNF), and the “1990 General Rules” was changed to CFR. In view of the fact that some people still use C&F in actual business, the “2000 General Rules” once again emphasized the need to adopt CFR said.
Buyer and seller obligations of CFR
Seller’s obligations
- Sign a contract of carriage to transport the goods from the designated port of shipment to the agreed port of destination; at the time and port specified in the sales contract, load the goods required by the contract on board and pay the freight to the port of destination; notify the buyer in time after shipment.
- Bear all costs and risks before the goods pass the ship’s rail at the port of shipment.
- Obtain an export license or other official documents at your own risk and expense, and go through all customs procedures required for the export of goods.
- Submit the commercial invoice, and provide the buyer at his own expense with the usual shipping documents used by the buyer to pick up the goods at the port of destination, or electronic information with the same effect.
Buyer’s obligations
- Accept the relevant documents provided by the seller, receive the goods, and pay for the goods according to the contract.
- Bear all risks after the goods pass the ship’s rail at the port of shipment.
- Obtain an import license or other official documents at your own risk and expense, and go through all customs procedures required for the import of goods, and pay customs duties and other related fees.
The burden of CFR unloading charges
In accordance with the terms of Cost and Freight, who will bear the unloading fee after the goods arrive at the port of destination is also a question that needs to be considered and clarified.
If liner transportation is used, since the loading and unloading fee has been included in the liner freight, there will be no dispute over who will bear the unloading fee. However, bulk commodities are generally transported by chartered ships. In the case of chartered transportation, who will bear the unloading fee?
Due to the different customary practices in various countries and regions, in order to avoid disputes on the burden of unloading charges, the deformation of CFR has arisen. Common CFR deformations in business are as follows:
- CFR Liner Terms , this variant means that the unloading fee is handled according to the liner practice, that is, the buyer does not bear the unloading fee.
- CFR Landed ,this variant means that the seller shall bear the unloading fee, including the barge fee that may be involved.
- CFR Ex Tackle ,this variant means that the seller is responsible for the cost of hoisting the goods from the cabin to the place where the hook reaches (on the wharf or on the barge). When the ship cannot dock, Barge charges are the buyer’s responsibility.
- CFR Ex Ship’s Hold , is concluded according to this condition. After the ship arrives at the port of destination and handles the handover on board, the buyer will open the cabin and bear the cost of unloading the cargo from the bilge to the wharf.
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