CFR vs CIF: who pays what

CFR is Cost and Freight. CIF is Cost, Insurance and Freight. Incoterms 2020.

The difference that matters

Full cost split

Cost blockCFRCIF
Export clearanceSellerSeller
Carriage to port / terminalSellerSeller
Loading onto main carriageSellerSeller
Main carriage (freight)SellerSeller
InsuranceNeither obligedSeller
Unloading at destinationBuyerBuyer
Import clearanceBuyerBuyer
Duties and import taxesBuyerBuyer
Risk passesWhen the goods are loaded on board at origin — even though the seller keeps paying to the destination.When the goods are loaded on board at origin — same as CFR.
Transport modeSea / inland waterwaySea / inland waterway

What people get wrong

CFR

Cost and risk split apart here. The seller pays freight for a voyage during which the buyer already carries the risk, and nobody is obliged to insure it.

CIF

The required cover is the minimum level, not all-risks. Buyers who assume they are fully covered find out at claim time.

Questions

What is the main difference between CFR and CIF?
They split 1 cost block differently. insurance falls to the none under CFR and the seller under CIF.
Where does risk pass under CFR?
When the goods are loaded on board at origin — even though the seller keeps paying to the destination.
Where does risk pass under CIF?
When the goods are loaded on board at origin — same as CFR.
Can CFR and CIF both be used for container shipments?
Both are written for sea and inland waterway transport. For containers, the goods usually leave the seller's control at a terminal rather than at the ship, so a rule for any mode of transport normally fits better.

Whichever term you agree, the paperwork has to say so

The Incoterm and named place belong on the commercial invoice, the packing list and the shipper's instructions — spelled the same way on each. ovrseas generates the set from one entry so they cannot disagree with each other.

Commercial invoice template

Compare other pairs

CFR vs CIPCFR vs CPTCFR vs DAPCFR vs DDPCFR vs DPUCFR vs EXWCFR vs FASCFR vs FCA

Incoterms® is a registered trademark of the International Chamber of Commerce. This page is an independent summary of how costs and risk are allocated and is not affiliated with or endorsed by ICC. For contract drafting, use the official Incoterms® 2020 rules published by ICC.