CFR vs EXW: who pays what

CFR is Cost and Freight. EXW is Ex Works. Incoterms 2020.

The difference that matters

Full cost split

Cost blockCFREXW
Export clearanceSellerBuyer
Carriage to port / terminalSellerBuyer
Loading onto main carriageSellerBuyer
Main carriage (freight)SellerBuyer
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.When the goods are placed at the buyer’s disposal at the seller’s premises — before anything is loaded.
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.

EXW

The buyer is formally responsible for export clearance in their supplier’s country, which they often cannot legally do. FCA usually fixes this.

Questions

What is the main difference between CFR and EXW?
They split 4 cost blocks differently. export clearance falls to the seller under CFR and the buyer under EXW; carriage to port / terminal falls to the seller under CFR and the buyer under EXW; loading onto main carriage falls to the seller under CFR and the buyer under EXW; main carriage (freight) falls to the seller under CFR and the buyer under EXW.
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 EXW?
When the goods are placed at the buyer’s disposal at the seller’s premises — before anything is loaded.
Can CFR and EXW both be used for container shipments?
EXW 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 DDPCFR vs DPUCFR 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.