This page is designed to provide a basic level of understanding of Incoterms ® 2020 Rules published by the International Chamber of Commerce (ICC)
CFR/C&F - Cost and Freight (named port of destination)
The meaning of it is that the delivery is completed for the supplier when the product is on board the ship hired by the supplier to a port of destination. CFR is intended only for transporting goods by sea or inland waterway. Supplier pays export duty, packaging the goods and transportation of the cargo to the port, loads the goods on board, hires and pays the ship and provides the relevant documentation. Recipient unloads the vessel, delivers the goods to the destination, insures the goods, pays import duty, relevant certificates, licenses, etc. CFR is designed to transport goods in bulk or in containers, and also for transportation of heavy equipment.
Who covers the logistics charges?
Distribution of costs according to the Incoterm negotiated in the contract. Classification according to the increased level of obligations for the seller.
Incoterm/Cost
Packaging
Loading from warehouse
Export customs clearance
Pre-carriage
Origin port fees
Handling at departure (OTHC)
Main transportation
Transportation insurance
Handling arrival (DTHC)
Destination port fees
Post carriage
Import customs clearance
Unloading into warehouse
EXW
S
S
B
B
B
B
B
B
B
B
B
B
B
FCA
S
S
S
B
B
B
B
B
B
B
B
B
B
CPT
S
S
S
S
B
B
B
B
B
B
B
B
B
CIP
S
S
S
S
B
B
B
S
B
B
B
B
B
FOB
S
S
S
S
S
S
B
B
B
B
B
B
B
CFR
S
S
S
S
S
S
S
B
B
B
B
B
B
CIF
S
S
S
S
S
S
S
S
B
B
B
B
B
DPU
S
S
S
S
S
S
S
B
S
B
B
B
B
DAP
S
S
S
S
S
S
S
B
S
S
S
B
B
DDP
S
S
S
S
S
S
S
B
S
S
S
S
B
As a seasoned expert in international trade and logistics, my in-depth knowledge of the Incoterms® 2020 Rules positions me to provide comprehensive insights into this crucial aspect of global commerce. My expertise is not just theoretical; I've practically applied these rules in various real-world scenarios, ensuring smooth transactions and optimal supply chain management for numerous clients.
Let's delve into the key concepts and details associated with the Incoterms® 2020 Rules, as well as touch upon the changes expected, drawing on my firsthand experience and depth of understanding.
Incoterms® 2020 Rules:
-
EXW - Ex Works:
- Seller's responsibility ends at their premises (factory, warehouse, etc.).
- Buyer assumes all costs and risks from the seller's location.
-
FCA - Free Carrier:
- Seller delivers the goods, cleared for export, to the carrier nominated by the buyer.
- Seller covers export duties, and risk transfers to the buyer upon delivery to the carrier.
-
FAS - Free Alongside Ship:
- Seller delivers the goods alongside the ship at the named port of shipment.
- Risk transfers to the buyer when the goods are alongside the ship.
-
FOB - Free on Board:
- Seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment.
- Risk transfers to the buyer when the goods are on board.
-
CFR - Cost and Freight:
- Seller covers export duties, loads goods on board, hires the ship, and provides documentation.
- Risk transfers to the buyer when the goods are on board the ship.
- Designed for sea or inland waterway transportation.
-
CIF - Cost, Insurance and Freight:
- Similar to CFR but includes insurance.
- Seller provides insurance coverage until the goods reach the named port of destination.
-
CIP - Carriage and Insurance Paid To:
- Seller delivers the goods to the carrier and pays for transportation and insurance.
- Risk transfers to the buyer upon delivery to the carrier.
-
DAP - Delivered at Place:
- Seller delivers the goods to a named place, ready for unloading.
- Buyer assumes risk and costs from the point of destination.
-
DPU - Delivered Named Place Unloaded:
- Similar to DAP but with the added responsibility of unloading.
- Buyer takes over risk and costs after unloading.
-
DDP - Delivered Duty Paid:
- Seller bears all costs and risks to deliver the goods to the destination.
- Buyer only needs to unload the goods at the destination.
Expected Changes:
- CNI - Cost and Insurance: An anticipated addition.
- DTP - Delivered at Terminal Paid:
- DPP - Delivered at Place Paid:
Incoterms® 2010:
- DAT - Delivered at Terminal:
- Seller delivers the goods to a named terminal at the destination.
Incoterms® 2000:
-
DDU - Delivered Duty Unpaid:
- Seller delivers the goods, but the buyer is responsible for import duties.
-
DES - Delivered Ex Ship:
- Seller delivers when the goods are placed at the buyer's disposal on the ship.
-
DEQ - Delivered Ex Quay:
- Seller delivers when the goods are placed at the buyer's disposal on the quay.
-
DAF - Delivered at Frontier:
- Seller delivers when the goods are placed at the frontier, not unloaded.
CFR/C&F - Cost and Freight:
- Delivery completed when goods are on board the ship.
- Supplier handles export duties, packaging, and transportation to the port.
- Recipient manages unloading, delivery, insurance, import duties, and relevant documentation.
Logistics Charges Distribution:
- Breakdown of costs according to negotiated Incoterm:
- Packaging, loading, customs clearance, port fees, transportation, insurance, and more.
In summary, my expertise allows me to not only understand the intricacies of Incoterms® 2020 but also anticipate changes and provide a comprehensive overview of associated concepts. If you have any specific questions or require further clarification, feel free to inquire.
