CFR vs CPT: which Incoterm should you use?
CFR (Cost and Freight) versus CPT (Carriage Paid To) — who pays freight, where risk transfers, and what each choice does to your landed cost. Last reviewed 16 July 2026.
CFR is sea-only and passes risk when goods are loaded on board; CPT works for any mode and passes risk when goods reach the first carrier. Neither insures.
CFR vs CPT at a glance
| Factor | CFR — Cost and Freight | CPT — Carriage Paid To |
|---|---|---|
| Group | C — Main carriage paid | C — Main carriage paid |
| Transport mode | Sea & inland waterway | Any mode |
| Who pays main freight | Seller | Seller |
| Insurance obligation | No obligation on either party | No obligation on either party |
| Risk transfers | When goods are loaded on board at the port of shipment — before the seller-paid freight | When goods are handed to the first carrier — before the seller-paid carriage |
| Export clearance | Seller | Seller |
| Import clearance | Buyer | Buyer |
| Best for | Sea freight where the buyer wants the seller to book carriage but will insure separately | Containerised or multimodal cargo where the seller pays carriage but the buyer insures |
Based on the Incoterms 2020 rules (ICC). Always confirm the exact obligations in your sales contract — as of 16 July 2026.
When to choose CFR
Choose CFR for port-to-port sea freight where the seller books and pays ocean carriage to the destination port. Risk passes to you once the goods are on board the vessel. It is the uninsured sea term — the seller pays freight, you arrange any cargo cover yourself.
When to choose CPT
Choose CPT for containerised, air or multimodal shipments where the seller pays carriage to a named destination but risk should transfer earlier — when the goods are handed to the first carrier. CPT is the any-mode equivalent of CFR and reflects how container and courier logistics actually pass responsibility.
What it does to your landed cost
Both terms have the seller pay main carriage without insuring, so the cost difference is small — it is really about transport mode and where risk sits. The seller-paid freight is folded into the price and feeds the customs value your duty and import VAT are charged on, just as under CIF. Since neither term insures, budget your own cargo cover separately. Run the lane through the calculator to see the landed cost and confirm which mode fits.
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