CFR condition is one of the conditions in the 11 Incoterms 2010 system of delivery conditions. Normally, CFR terms are applied to transport at sea and inland waterways. Let's find out with Giaipahdonggoi.net what CFR conditions are!
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1. What is a CFR condition?
The full CFR term “Cost and Freight” is cost and freight or cost plus freight is a legal term used in international commercial contracts that stipulates that the seller is request to arrange the carriage of the goods by sea to the port of destination and provide the buyer with the necessary documents to be able to collect the goods from the carrier.
What is a CFR condition?
The seller must deliver the goods and clear them for export and load the goods on board the vessel. The risk of loss or damage passes to the buyer when the seller loads the items on board the vessel but before primary transit occurs. This term means that the seller is not responsible for insuring the goods against loss or damage during transit.
Price and freight is a commonly used International Trade Terms, a globally recognized set of terms that help create the standard for foreign trade contracts and are published and updated regularly. regularly by the International Chamber of Commerce (ICC). The International Trade Terms are intended to prevent confusion by clarifying the obligations of the buyer and the seller, such as the obligation to transport and clear the goods for export, and the actual point at which risk passes from the seller to the seller. buyer.
The risk is transferred from the seller to the buyer when the seller has delivered the goods on board. Buyer is responsible for paying all additional transportation costs from the port of destination, including import duties and taxes.
Contracts involving international transport often contain abbreviated commercial terms describing matters such as the time and place of delivery, as well as the place of payment, and the conditions under which risk and damage The loss passes from the seller to the buyer and appoints the party responsible for the costs of shipping and insurance.
If the buyer and seller have agreed on the price and freight of their transaction, the seller must arrange and pay for the carriage of the goods to the named port.
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2. How to calculate CFR . price
To make foreign trade contracts, make C/O, calculate costs to determine product cost, etc. We need to know the CFR price. The CFR price is determined by the following formula. Provided that the seller will bear additional freight for the carriage of the goods to the port and unloading. Buyer will bear the cost of unloading depending on the agreement.
CFR price = FOB price + Shipping cost
Inside:
FOB price is the price at the border gate of the exporting party (excluding insurance costs and freight costs to the port of importing party).
3. Obligations of the parties under CFR
Obligations of the parties under CFR
For the seller
Goods, commercial invoices and documents.
Packing and marking for export.
Export license and customs clearance.
Transport and deliver goods on board.
Pay the cost of loading the goods on board.
Delivery at the designated port of destination.
Delivery in accordance with the specified contract.
Pre-shipment inspection fee.
For buyers
Payment for goods as specified in the purchase and sale contract.
The risk starts with in-flight delivery.
Discharge and continue shipping.
Related procedures and import taxes.
Cost of pre-shipment inspection (for import clearance).
4. What other Incoterms are similar to CFR?
There are three other terms that are closely related to CFR and commonly used in commercial contracts.
FAS (Free Along with Vessel) means that the seller only has to deliver the goods to the port next to the vessel and the responsibility to deliver the goods to the buyer at that time.
FOB (free on board) requires the seller to also load the goods on board.
CIF (insurance of costs and freight) requires the seller to arrange for carriage of the goods by sea to the port of destination, but the seller must add insurance of the goods until the goods arrive at the port of destination.
For costs and freight, the seller is not responsible for insuring the goods until the goods arrive at the port of destination.
Above is some information about CFR conditions that Giaiphapdonggoi.net has shared with you, hope this information is of some help to you.
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