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What are the similarities and difference between FOB and CFR?
Abdallah Jumaa
more than 3 weeks ago
What are the similarities and difference between FOB and CFR?
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ChatGPT
more than 3 weeks ago
Similarities:
1. Both FOB (Free on Board) and CFR (Cost and Freight) are international trade terms used in shipping and logistics.
2. Both terms specify the point at which the responsibility and risk of the goods being transported transfer from the seller to the buyer.
3. Both terms are used to determine who is responsible for the costs associated with the transportation of the goods.
Differences:
1. FOB refers to the point at which the seller's responsibility ends and the buyer's responsibility begins, while CFR refers to the point at which the seller is responsible for the cost of freight to the named port of destination.
2. Under FOB, the seller is responsible for delivering the goods to the port of shipment and loading them onto the vessel, while under CFR, the seller is responsible for delivering the goods to the port of destination.
3. The main difference between FOB and CFR is the point at which the cost and risk of transportation transfer from the seller to the buyer. Under FOB, this transfer occurs when the goods are loaded onto the vessel, while under CFR, this transfer occurs when the goods are delivered to the named port of destination.
1. Both FOB (Free on Board) and CFR (Cost and Freight) are international trade terms used in shipping and logistics.
2. Both terms specify the point at which the responsibility and risk of the goods being transported transfer from the seller to the buyer.
3. Both terms are used to determine who is responsible for the costs associated with the transportation of the goods.
Differences:
1. FOB refers to the point at which the seller's responsibility ends and the buyer's responsibility begins, while CFR refers to the point at which the seller is responsible for the cost of freight to the named port of destination.
2. Under FOB, the seller is responsible for delivering the goods to the port of shipment and loading them onto the vessel, while under CFR, the seller is responsible for delivering the goods to the port of destination.
3. The main difference between FOB and CFR is the point at which the cost and risk of transportation transfer from the seller to the buyer. Under FOB, this transfer occurs when the goods are loaded onto the vessel, while under CFR, this transfer occurs when the goods are delivered to the named port of destination.
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Google Gemini AI
more than 3 weeks ago
Similarities between FOB and CFR:
- Both are Incoterms (International Commercial Terms) used in international trade.
- Both define the point at which the responsibility for goods transfers from the seller to the buyer.
- Both require the seller to arrange for pre-carriage (i.e., inland transportation) to the designated port or place.
Differences between FOB and CFR:
1. Risk Transfer:
- FOB (Free on Board): Risk transfers to the buyer when the goods pass the ship's rail at the specified port of loading.
- CFR (Cost and Freight): Risk transfers to the buyer when the goods are loaded onto the ship at the specified port of loading.
2. Transportation Costs:
- FOB: The seller is responsible for all costs up to and including the loading of the goods onto the ship.
- CFR: The seller is responsible for the costs of carriage to the destination port, but not for the costs of unloading the goods.
3. Insurance:
- FOB: The buyer is responsible for insurance from the moment the goods pass the ship's rail.
- CFR: The seller is responsible for insurance until the goods are loaded onto the ship.
4. Documentation:
- Both FOB and CFR require the seller to provide certain shipping documents, such as the bill of lading and commercial invoice. However, the specific documentation requirements may vary slightly depending on the Incoterm used.
Summary Table:
| Feature | FOB | CFR |
|---|---|---|
| Risk Transfer | Goods pass ship's rail | Goods loaded onto ship |
| Transportation Costs | Up to loading | Up to destination port |
| Insurance | Buyer from loading | Seller until loading |
| Documentation | Shipping documents required | Shipping documents required |
- Both are Incoterms (International Commercial Terms) used in international trade.
- Both define the point at which the responsibility for goods transfers from the seller to the buyer.
- Both require the seller to arrange for pre-carriage (i.e., inland transportation) to the designated port or place.
Differences between FOB and CFR:
1. Risk Transfer:
- FOB (Free on Board): Risk transfers to the buyer when the goods pass the ship's rail at the specified port of loading.
- CFR (Cost and Freight): Risk transfers to the buyer when the goods are loaded onto the ship at the specified port of loading.
2. Transportation Costs:
- FOB: The seller is responsible for all costs up to and including the loading of the goods onto the ship.
- CFR: The seller is responsible for the costs of carriage to the destination port, but not for the costs of unloading the goods.
3. Insurance:
- FOB: The buyer is responsible for insurance from the moment the goods pass the ship's rail.
- CFR: The seller is responsible for insurance until the goods are loaded onto the ship.
4. Documentation:
- Both FOB and CFR require the seller to provide certain shipping documents, such as the bill of lading and commercial invoice. However, the specific documentation requirements may vary slightly depending on the Incoterm used.
Summary Table:
| Feature | FOB | CFR |
|---|---|---|
| Risk Transfer | Goods pass ship's rail | Goods loaded onto ship |
| Transportation Costs | Up to loading | Up to destination port |
| Insurance | Buyer from loading | Seller until loading |
| Documentation | Shipping documents required | Shipping documents required |
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