Incoterms® CFR Dubai: Cost and Freight Explained
CFR (Cost and Freight) Dubai is an **Incoterms® 2020** rule for **sea/ inland waterway transport only**. It splits costs/risks at a precise point:
Seller's Obligations (Exporter)
- Deliver goods **on board the vessel** at **port of loading** (e.g., Jebel Ali, Port Rashid, or other UAE port).
- **Pay** freight to **named port of destination (Dubai)**.
- Provide **commercial invoice, packing list, bill of lading (clean, on board)**.
- Export clearance, licenses, security requirements.
Buyer's Obligations (Importer)
- Risk transfers at loading port** (goods on board). Buyer bears all loss/damage thereafter.
- **Import clearance, duties, taxes, VAT** at Dubai Customs.
- **Unloading at destination port** (unless contract says "CFR Dubai, unloaded" — rare).
- Main carriage insurance (**NOT seller's duty** — unlike CIF). **Buyer must arrange.**
- Pre-shipment inspection (if required).
Critical Nuances
- "Dubai" = Port of Destination. Specify terminal (e.g., **CFR Jebel Ali Terminal 3**).
- No Insurance Included. CFR ≠ CIF. Buyer **must** insure from loading port onward.
- Multimodal? Use **CPT (Carriage Paid To)** for containerized/air/rail/road. CFR is **only sea/waterway**.
- Letter of Credit: Banks require **clean on-board B/L** for payment under CFR.
When to Use CFR Dubai
Seller controls shipping/logistics to Dubai port, wants predictable freight cost, buyer handles import formalities & insurance. Common for **commodities, bulk, project cargo** to UAE.
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