Trade terms
CIF and CFR Coffee
Quick answer
Under both CFR and CIF the seller pays freight to the named destination port, and under both risk passes to the buyer when the coffee is loaded on board at origin — exactly as under FOB. The only difference is insurance: CIF obliges the seller to contract cargo cover at a minimum level; CFR does not, so a CFR buyer without their own marine policy is uninsured for the voyage.
The split that catches people out
Cost and risk part company at loading
The seller pays freight all the way to the destination port. But if the container is lost or damaged mid-ocean, that is the buyer’s loss — risk passed when the goods were loaded at origin. The seller has paid for a voyage whose risk the buyer carries.
Under all three terms risk passes when the goods are on board at the port of loading. CFR and CIF move the freight cost to the seller — they do not move the risk transfer point.
This is not a flaw in the terms — it is the point of them. They let a seller with good freight rates bundle carriage into the price while leaving the buyer with the insurable interest they already had.
What CIF adds over CFR
Exactly one thing: an obligation on the seller to contract cargo insurance for the voyage, for the buyer’s benefit, at a stated minimum level and a minimum sum insured — conventionally the contract value plus ten per cent. The buyer is the beneficiary even though the seller contracts it, which is why the insurance document forms part of the document set.
Minimum cover is narrower than most buyers expect
The default level of cover required under CIF is a restricted, named-perils policy — not all-risks. It responds to major casualties such as vessel loss, stranding, fire and general average, and not to a range of ordinary handling and condition losses. If your exposure is broader, agree an upgraded level of cover in the contract.
What each party does
| Seller — CFR | Seller — CIF | Buyer — both | |
|---|---|---|---|
| Preparation, packing, inland transport | Yes | Yes | — |
| Export clearance and loading on board | Yes | Yes | — |
| Ocean freight to named port | Yes | Yes | — |
| Cargo insurance | Not required | Yes — minimum level unless upgraded | Own cover under CFR; beneficiary under CIF |
| Risk from loading onwards | — | — | Yes |
| Discharge at destination | Per contract of carriage | Per contract of carriage | Often buyer — agree it |
| Import clearance, duties, delivery | — | — | Yes |
Choosing between them
CFR makes sense when
- The seller has better freight rates
- An exporter shipping regular volume on an East African routing often books better than an occasional importer
- You already hold an open cargo policy
- The absence of seller insurance then costs nothing, and you take the freight benefit
- You want a landed-cost comparison
- CFR gives one number to compare across origins without pricing freight separately
CIF makes sense when
- It is a first import
- One counterparty handling freight and insurance removes two things to get wrong
- You have no open cargo policy
- Seller-arranged cover is simpler than per-shipment cover
- A letter of credit is involved
- Banks frequently require an insurance document in the set
- Volumes are small
- A single container rarely justifies arranging freight and cover separately
Established importers with volume generally prefer FOB, because their own freight rates and open cargo policy beat what is bundled into a C-term price. The Incoterms comparison sets all the terms used in coffee side by side.
What to specify
Clauses worth writing explicitly
- Named destination port
- Required — “CFR Europe” is not a term
- Incoterms edition
- State it
- Discharge costs
- Whether destination terminal handling is in the freight or charged separately — a common unexpected cost
- Routing and transhipment
- Whether transhipment is permitted, and via where
- Level of cover (CIF)
- Whether minimum cover is acceptable or an upgrade is required
- Sum insured and currency (CIF)
- Contract value plus the agreed percentage, in the contract currency
- Claims handling (CIF)
- Where claims are payable and who surveys
- Buyer’s own cover (CFR)
- Confirm in writing that it attaches from loading at origin
We are not insurance advisers
This is practical trade context, not insurance advice. Cover levels, exclusions and claims procedures depend on the policy actually written; discuss your exposure with your broker before relying on minimum CIF cover.
CFR and CIF quotations
We can quote CFR or CIF to your destination port, with the level of cover stated on CIF. Tell us whether your own marine cover attaches from origin loading.
Request Current Crop OfferFrequently asked questions
What is the difference between CFR and CIF?
Is CFR the same as C&F?
Who insures the coffee under CFR?
Is CIF insurance enough?
When does risk transfer under CIF?
Should a first-time importer buy CIF?
Tell us the coffee you need
Lots can be specified by origin, region, process, grade, screen, moisture, defect tolerance, crop year and packaging. Send what you know and we will confirm what each origin realistically supports.
Keep reading
Related guides
- FOB CoffeeFOB in green coffee contracts: what the seller delivers, where risk transfers, and the East African specifics of inland transit from landlocked origins.
- Incoterms for CoffeeHow Incoterms apply to green coffee shipments: the terms actually used, where cost and risk transfer under each, and how to choose one for your situation.
- Coffee Shipping DocumentsThe documents that accompany a green coffee shipment — invoice, packing list, bill of lading, certificate of origin, phytosanitary and more — and which are required when.