CFR vs DAP: who pays what

CFR is Cost and Freight. DAP is Delivered at Place. Incoterms 2020.

The difference that matters

The cost split is identical. What separates them is where risk passes — see below.

Full cost split

Cost blockCFRDAP
Export clearanceSellerSeller
Carriage to port / terminalSellerSeller
Loading onto main carriageSellerSeller
Main carriage (freight)SellerSeller
InsuranceNeither obligedNeither obliged
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.At the named destination, with the goods still on the arriving vehicle.
Transport modeSea / inland waterwayAny 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.

DAP

If the buyer is slow to clear customs, the goods sit and the demurrage lands on the seller, who still controls the carriage contract.

Questions

What is the main difference between CFR and DAP?
The cost split is identical. They differ in where risk passes: CFR — When the goods are loaded on board at origin — even though the seller keeps paying to the destination. DAP — At the named destination, with the goods still on the arriving vehicle.
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 DAP?
At the named destination, with the goods still on the arriving vehicle.
Can CFR and DAP both be used for container shipments?
DAP 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 CIFCFR vs CIPCFR vs CPTCFR 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.