FOB and CFR under Inco terms 2020

Difference between CFR and FOB  as per Inco terms rules 2020

Cost and Freight at named location Vs. Free On Board at a named location

Under FOB delivery terms, the seller completes his obligation of costs and risks under movement of goods and passes to buyer when the goods are placed to the Vessel (on board the ship).  But under CFR delivery rules, the seller transfers costs of movement of goods to the buyer when the goods arrived at buyer’s side.

The costs covered by the seller under CFR terms passes from seller to buyer when the goods arrived at named destination at buyer’s side.  But the seller under FOB is responsible to bear the cost till the goods gone onboard the vessel nominated by the buyer.

The freight payment against main carriage under CFR is liable to pay by the seller.  But under FOB, the main carriage is undertaken by the buyer.

The buyer has control over deciding ocean freight, as main carriage is arranged by him and he holds strength in tracking shipment under FOB delivery terms.  But under CFR, the buyer has to depend upon the seller for getting export shipment details with shipping tracking, as the seller has control over freight under main carriage.

  

 

CFR – Cost and Freight (named Place)

 

FOB – Free On Board (named Places)

 

Costs

Risks

 

 

Costs

Risks

Warehouse services

Seller

Seller

 

Warehouse services

Seller

Seller

Marking and labeling

Seller

Seller

 

Marking and labeling

Seller

Seller

Packing of Goods

Seller

Seller                                   

 

Packing of Goods

Seller

Seller                                   

Loading at Seller’s premises

Seller

Seller

 

Loading at Seller’s premises

Seller

Seller

Transportation from Seller’s premises to Load port

Seller

Seller

 

Transportation from Seller’s premises to Load port

Seller

Seller

Unloading at Loading Port

Seller

Seller

 

Unloading at Loading Port

Seller

Seller

Loading to Vessel

Seller

Seller

 

Loading to  Vessel

Seller

Seller

Export documentation

Seller

Seller

 

Export documentation

Seller

Seller

Export Customs Clearance

Seller

Seller

 

Export Customs Clearance

Seller

Seller

Export Taxes and duties (if any)

Seller

Seller

 

Export Taxes and duties (if any)

Seller

Seller

Handling  at Load Port

Seller

Seller

 

Handling  at Load Port

Seller

Seller

Main Carriage (Ocean Freight

Seller

Buyer

 

Main Carriage (Ocean Freight)

Buyer

Buyer

Import Customs Clearance

Buyer

Buyer

 

Import Customs Clearance

Buyer

Buyer

Import Documentation

Buyer

Buyer

 

Import Documentation

Buyer

Buyer

Import Taxes and Duties (if any)

Buyer

Buyer

 

Import Taxes and Duties (if any)

Buyer

Buyer

Transportation from named place to final destination  of buyer

Buyer

Buyer

 

Transportation from destination

 port to named place

Buyer

Buyer

Unloading at named place

Buyer

Buyer

 

Unloading at named place

Buyer

Buyer

 

 

 Detailed posts about CFR and FOB are explained easily with simple language in this website, you may click below to read those.

FOB  Free On Board

 

CFR  Cost and Freight

 

The above information about FOB and CFR may be added by sharing your thoughts below:

Click here to read other delivery rules under Inco terms  

Learn practical problems and solutions in Exports and Imports

Banking rules related to Exports and Imports in India

How to open Letter of Credit, easily explained here

 

What does CPT mean under Inco Terms 2020?     Meaning of FCA under Incoterms 2020     EXW,Ex Works under Inco terms 2020     Inco Terms, Different stage where risks and costs transfer from Seller to Buyer     Parties involved to use Incoterms directly and indirectly     Is it necessary to use trade mark of Incoterms under Sale contract     Mention year of Inco Terms under Sale contract     Inco Terms and Sale Contract between buyer and seller     Inco Terms 2020 Rules for Delivery of Goods         Buyer or Seller? Who pays Insurance under DAP Inco terms?         Under FCA Inco terms, Insurance is paid by buyer or seller?     Under EXW Ex works, who arranges Insurance?     04 Categories of Inco Terms 2020     D Category of Delivery terms under Incoterms 2020     CIP terms of movement, Unloading goods by Buyer or Seller?        C Rules of Delivery terms under Incoterms 2020       F Rules of Inco Terms 2020E Category of Incoterms 2020  


Discussion Forum

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