CFR (Cost and Freight) is the Incoterm under which the Pakistani seller pays goods cost and ocean freight to the destination port — but risk transfers to the buyer once cargo is on board at Karachi.
CFR — Cost and Freight, named destination port — is the Incoterms® 2020 rule under which the seller delivers the goods on board the vessel at the port of loading and pays the ocean freight to the named destination port. Importantly, risk transfers to the buyer when the goods are placed on board the vessel at the loading port — not at destination. The seller is responsible for cost up to the destination port, but not for risk during the ocean leg.
CFR applies only to sea and inland waterway transport. For multimodal / container shipments routed through a destination CY, CPT (Carriage Paid To) is the technically-correct equivalent, but CFR remains industry-standard in agri-commodity trade.
For Pakistani spice, seed and herb exporters, CFR is commonly used by buyers who want a single landed-port price without arranging insurance themselves. The seller books and pays the ocean freight (typically with Maersk, MSC, CMA-CGM, ONE, Hapag-Lloyd) and the buyer takes care of marine insurance and destination clearance.
CFR is most common to GCC ports (Jebel Ali, Khalifa Port, Dammam, Jeddah), East Africa (Mombasa, Dar es Salaam), Bangladesh (Chittagong), and Sri Lanka (Colombo) — destinations where Pakistani exporters have established freight relationships and can quote freight competitively.
What CFR includes vs FOB:
Buyer responsibility under CFR:
A CFR quote should always specify the destination port (CFR Jebel Ali, CFR Chittagong) and the destination terminal where relevant — freight rates differ.
Reference: Incoterms® 2020, International Chamber of Commerce (ICC), Paris — Publication 723. CFR rule applies to sea/inland waterway only.