What does Cost and Freight (CFR) mean?

Under CFR, the seller pays to get the coffee onto the ship and covers ocean freight to the named destination port. But risk transfers to you the moment it's loaded at origin - before the ship has even left the port.

That split feels counterintuitive at first: the seller is still paying for the journey, but you're bearing the risk for anything that goes wrong during it. Under CFR, you should be arranging your own marine insurance. If you're not, you're exposed.

CFR is one of the older Incoterms and is most common in bulk or break-bulk sea freight. For containerised coffee - which covers the vast majority of green coffee trade - FCA or CIP are generally more appropriate. If you see CFR on a contract, read the risk transfer clause carefully.