In international trade, clarity on cost, risk, and responsibility division is paramount. CFR, or Cost and Freight, is a crucial Incoterms® rule defining this allocation for sea or inland waterway transport. Under CFR, the seller fulfills their obligation by delivering the goods on board the vessel at the port of shipment. The seller bears all costs necessary to bring the goods to the named port of destination, including the main carriage freight. However, a critical and often misunderstood aspect of CFR is the transfer of risk and the responsibility for insurance. The pivotal moment under CFR occurs when the goods pass the ship's rail at the port of shipment. At this precise point, the risk of loss or damage to the goods transfers from the seller to the buyer. Consequently, the seller is not responsible for procuring marine insurance against the buyer's risk of loss or damage during the voyage. The obligation to insure the cargo rests solely with the buyer. This is a fundamental distinction from CIF (Cost, Insurance, and Freight), where the seller must obtain minimum coverage insurance. The seller's primary responsibilities under CFR include arranging and contracting for the carriage of the goods to the agreed port of destination, paying the associated freight costs, providing a commercial invoice, and securing the necessary export licenses. The seller must also deliver the goods on board the vessel and provide the buyer with the transport document (e.g., a bill of lading) to enable the buyer to claim the goods at the destination port. The buyer's responsibilities are significant. They must accept the transport documents provided by the seller, receive the goods at the destination port, and bear all costs and risks from the moment the goods are loaded. Most importantly, the buyer must arrange and pay for cargo insurance from the port of shipment onward. Failure to do so leaves the buyer fully exposed to financial loss if the goods are damaged or lost during transit. Why would parties choose CFR? For sellers, it offers control over the main carriage logistics while limiting liability post-loading. For buyers with established insurance relationships or those seeking potentially broader coverage, CFR can be advantageous. However, the buyer assumes a substantial burden. They must be proactive in securing insurance immediately upon the risk transfer. Any delay can be catastrophic. Furthermore, buyers should verify the seller's chosen carrier for reliability. In practice, clear contract language specifying "CFR [Named Port of Destination], Incoterms® 2020" is essential. Both parties must understand that the seller's booking of the vessel does not equate to assuming transit risk. The buyer's insurance must be in place before shipment loading commences. In summary, CFR is a trade term where the seller's duty includes booking the vessel and paying freight, but the imperative to insure the cargo lies unequivocally with the buyer from the point of loading. Understanding this demarcation is vital for managing risk and ensuring smooth international transactions.