DDP and CFR under Inco terms 2020, a comparison

Difference between DDP and CFR

CFR vs. DDP,  a comparison based on ICC delivery rules 2020

Delivery terms DDP and CFR

Delivered Duty Paid to a named place (DDP) and  Cost and Freight (CFR) are  the two of eleven delivery rules for movement of goods under Incoterms 2020.

Let us discuss here the difference between both DDP and CFR delivery terms under Inco terms

First of all, CFR rule is meant for movement of goods on waterways, as it is known as Marine restricted mode of transport whereas DDP rule may be used for movement of goods by Air, Sea or Land.

Another difference between DDP and CFR is; compared to CFR terms, higher risks and costs are involved for a seller under DDP terms for movement of goods, as he is responsible for pre carriage, main carriage, on carriage, import customs clearance and import duties if any. 

Under CFR rules, the seller discharges his obligation on costs  when goods arrives at named destination, but risks transfers to the buyer immediately upon the goods loaded to the Carrier in Seller’s side.  But under DDP terms, the seller is liable to undertake the risks and costs when goods are delivered to buyer at his premises or named place contracted.

In an international trade, the seller is responsible for Import clearance at buyer’s country under DDP. But under CFR terms, the buyer is liable for the costs and risks of import customs clearance and duties at buyer’s country.

Under a contract of carriage DDP, on carriage is under the risk and cost of Seller.  But on carriage responsibility under CFR is on the shoulder of buyer.

Under CFR delivery terms, delivery of goods takes place when the seller hands goods over to the carrier whereas under DDP terms, the delivery takes place at the destination named place at buyer’s premises or named place.

Click below to read CFR and DDP separately written to understand both terms in detail:

CFR  Cost and Freight

DDP  Delivered Duty Paid

The details given above describes the difference between DDP and CFR.  Please share your views about the difference between CFR and DDP below:

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