06 snags for importer under CFR terms of delivery

CFR, disadvantages to Importer (Buyer)

Are you an importer who is entering into a contract of carriage on CFR basis?  If yes, the following information helps you to strengthen your knowledge for better understanding and smooth handling of your business transaction with your supplier.  We discuss merits and demerits of each Inco terms 2020 and write in this website as separate articles.

Here we discuss about the challenges faces by an importer in international trade.  Here are those disadvantages for buyer under CFR terms:

01. In an import export business, one of the main disadvantages under CFR for importer is that the cost of movement of goods is taken care till the named place by the exporter, but the risks of movement of goods are on importer’s shoulder immediately up on the cargo loaded in to the Vessel.


02. The main carriage is controlled by the exporter under CFR terms in export import business by handling ocean freight.  Appointing a poor shipping carrier or a poor freight forwarder to save ocean freight by the seller may affect the movement of goods in rendering good service to importer in delivering the goods. This is a demerit for importer when contract of carriage is on CFR basis.

03. In export import trade, the importer under CFR terms of delivery should be well conversant with import customs clearance process, import documentation, import licensing procedures, import taxes if any etc. failing which he is liable to meet additional expenses than anticipated resulting loss in the said business transaction.  This is another disadvantage for importer under CFR terms of delivery.


04. One of the other demerits for buyer is that the importer under CFR terms also is liable to undertake on carriage process from the destination named port to his final destination.  Lacking sound knowledge and experience in handling local transportation results additional costs than calculated.


05. Another disadvantage for importer is that the exporter handles main carriage under CFR delivery rules. The importer has to request the exporter for getting export data, EGM or Vessel sailing details. 


06. Although the cost is paid to the named location by seller, the unloading liability is with the buyer under CFR delivery rules.  So the costs and risks involved under unloading goods at buyer’s place is under the liability of buyer. This is another demerit for importer when the contract of carriage is on CFR basis in international trade.

We hope, the above information about the pitfalls under CFR delivery terms for buyer helps you.

Share your experience in handling CFR delivery terms and its pros and cons under comment column below:

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers