CIF & CRF

CIF is one of the 11 In coterms (International Commercial Terms) defined by the International Chamber of Commerce (ICC).
It’s used only for sea or inland waterway transport and defines responsibilities between a seller and buyer in international trade.
Under CIF terms, the seller is responsible for:
1. Cost of goods and shipping to the destination port.
2. Insurance covering the goods during transit.
3. Freight to transport the goods to the agreed destination port.
Once the goods are loaded on board the vessel, risk transfers to the buyer, even though the seller pays for shipping and insurance.
Seller’s Responsibilities in CIF:
-Export packaging and documentation
-Origin terminal handling
-Loading at the port of origin
-Main carriage (freight) to the destination port
-Insurance coverage (minimum) during transit
-Export duty and customs clearances
Buyer’s Responsibilities in CIF
-Unloading at destination port
-Destination port handling
-Import customs clearance and duties
-Inland transportation to the final destination
-Insurance beyond port (if needed)
Advantages of CIF for the Buyer:
-Seller arranges and pays for shipping and insurance
-Easier logistics for buyers unfamiliar with export regulations
-Lower upfront effort in managing freight
Disadvantages of CIF for the Buyer:
-Risk transfers earlier (at loading), not delivery
- Seller chooses carrier and insurance (may be basic coverage)
-Less control over logistics and potential hidden costs at the destination
When to Use CIF:
-When shipping bulk cargo, raw materials, or sea freight
-When the buyer prefers the seller to handle logistics and insurance
-When goods are being delivered to a
A well-established port with experienced customs brokers
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 What Does CFR Mean in Petroleum Contracts?

CFR (often mistakenly written as CRF) stands for Cost and Freight, and it is one of the official Incoterms (International Commercial Terms) published by the ICC (International Chamber of Commerce).

✅ CFR = Cost and Freight

➤ The seller pays for the cost of transporting the goods to the destination port.

➤ However, risk transfers to the buyer once the goods are loaded on board the ship at the port of origin.

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📋 Key Terms of CFR in Oil & Petroleum Deals

1. Delivery Point:

The seller delivers the goods when they are loaded onboard the vessel at the port of origin.

The seller arranges and pays for the freight to the agreed destination port.

2. Risk Transfer:

The risk of loss or damage to the cargo passes to the buyer as soon as the goods are loaded onto the vessel.

3. Required Documents (commonly):

• Commercial Invoice

• Bill of Lading (B/L)

• Certificate of Origin (if applicable)

• Certificate of Quality (COQ)

• Certificate of Quantity (CQ)

• Packing List

• Others depending on the specific deal

4. No Insurance Included:

Under CFR, the seller is NOT responsible for insuring the goods during transit.

➤ If insurance is needed, use CIF (Cost, Insurance, and Freight).

5. Port of Destination Must Be Specified:

For example:

• CFR Shanghai Port, China

• CFR Karachi Port, Pakistan

• CFR Mombasa Port, Kenya

6. Laycan (Laydays and Cancelling Date):

The shipping window within which the vessel must arrive for loading. This is typically defined in oil contracts.

⸻

✅ Advantages for the Buyer:

• The buyer does not need to arrange or pay for ocean freight.

• Simplified logistics up to the arrival port.

⚠️ Important Note:

Although the seller pays for the freight, the buyer assumes the risk as soon as the cargo is loaded onboard the ship.

Therefore, if protection is needed, the buyer should arrange insurance or use CIF terms instea

.