What is the main difference between CFR and CIP?

They split 1 cost block differently. insurance falls to the none under CFR and the seller under CIP.

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 CIP?

When the goods are handed to the first carrier — same as CPT.

Can CFR and CIP both be used for container shipments?

CIP works for any mode of transport. CFR is written for sea and inland waterway transport only.

CFR vs CIP: who pays what

CFR is Cost and Freight. CIP is Carriage and Insurance Paid To. Incoterms 2020.

The difference that matters

Insurance:CFRNeither obliged·CIPSeller

Full cost split

Cost block	CFR	CIP
Export clearance	Seller	Seller
Carriage to port / terminal	Seller	Seller
Loading onto main carriage	Seller	Seller
Main carriage (freight)	Seller	Seller
Insurance	Neither obliged	Seller
Unloading at destination	Buyer	Buyer
Import clearance	Buyer	Buyer
Duties and import taxes	Buyer	Buyer
Risk passes	When the goods are loaded on board at origin — even though the seller keeps paying to the destination.	When the goods are handed to the first carrier — same as CPT.
Transport mode	Sea / inland waterway	Any mode

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.

CIP

The 2020 revision raised CIP cover above CIF’s. Contracts copied from pre-2020 templates often still assume they match.

Questions

What is the main difference between CFR and CIP?: They split 1 cost block differently. insurance falls to the none under CFR and the seller under CIP.
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 CIP?: When the goods are handed to the first carrier — same as CPT.
Can CFR and CIP both be used for container shipments?: CIP works for any mode of transport. CFR is written for sea and inland waterway transport only.

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 CIF CFR vs CPT CFR vs DAP CFR vs DDP CFR vs DPU CFR vs EXW CFR vs FAS CFR 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.