CFR vs DDP: who pays what

CFR is Cost and Freight. DDP is Delivered Duty Paid. Incoterms 2020.

The difference that matters

Full cost split

Cost blockCFRDDP
Export clearanceSellerSeller
Carriage to port / terminalSellerSeller
Loading onto main carriageSellerSeller
Main carriage (freight)SellerSeller
InsuranceNeither obligedNeither obliged
Unloading at destinationBuyerBuyer
Import clearanceBuyerSeller
Duties and import taxesBuyerSeller
Risk passesWhen the goods are loaded on board at origin — even though the seller keeps paying to the destination.At the named destination, ready for unloading, after import clearance.
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.

DDP

Many countries will not let a non-resident seller act as importer of record, and unrecoverable import VAT quietly becomes a cost.

Questions

What is the main difference between CFR and DDP?
They split 2 cost blocks differently. import clearance falls to the buyer under CFR and the seller under DDP; duties and import taxes falls to the buyer under CFR and the seller under DDP.
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 DDP?
At the named destination, ready for unloading, after import clearance.
Can CFR and DDP both be used for container shipments?
DDP 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 DAPCFR 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.