Author name: Benjamin

In the international business and marketing, Incoterms such as Cost and Freight (CFR) describe the main roles and duties of both the buyer and the seller. CFR makes the seller responsible to put the goods at a certain port and the buyer pays for the costs of transport up to the port. Once the goods are loaded on the vessel, risks pass to the buyer and the costs from shipment to the final destination are met including import custom duties and handling fees. Similar to CFR there are CIF in which insurance is included in CFR plus CIP in which the sellers get to arrange insurance to the destination. These Incoterms are very crucial in foreign trade contracts so that any confusion can be eliminated when contracting by avoiding the use of ambiguous words or phrases.