Legal Definitions - C & F

C & F stands for COST AND FREIGHT.

This is an international shipping term used in trade agreements. When a contract specifies "Cost and Freight" (C & F) to a named port of destination, it means the seller is responsible for paying the costs of the goods and the freight charges required to bring the goods to that specific port. However, a crucial aspect of C & F is that the risk of loss or damage to the goods transfers from the seller to the buyer once the goods have been loaded onto the vessel at the port of shipment (the origin port), not when they arrive at the destination port. The buyer is then responsible for arranging and paying for insurance for the main carriage and any costs incurred after the goods arrive at the destination port, such as unloading, customs duties, and onward transportation.

Here are some examples to illustrate how C & F works:

• Example 1: International Furniture Shipment

  A furniture manufacturer in Vietnam agrees to sell a large container of custom-made wooden chairs to a distributor in the United Kingdom under "C & F London Port."

  How it illustrates C & F: The Vietnamese manufacturer (seller) is responsible for paying for the chairs themselves, transporting them to the port in Vietnam, loading them onto the ship, and covering the cost of ocean freight all the way to London Port. However, the risk of the chairs being damaged or lost transfers to the UK distributor (buyer) as soon as the container is loaded onto the vessel in Vietnam. The distributor is then responsible for purchasing insurance for the sea journey, paying for the unloading of the container in London, handling customs duties, and arranging for the chairs to be transported from London Port to their warehouse.

• Example 2: Bulk Chemical Order

  A chemical supplier in Germany sells several tons of a specialized compound to a pharmaceutical company in Brazil, with the terms specified as "C & F Santos Port, Brazil."

  How it illustrates C & F: The German chemical supplier (seller) must pay for the chemical compound, arrange its transport to the German port, ensure it's loaded onto the ship, and cover the freight costs to Santos Port in Brazil. The moment the chemicals are loaded onto the ship in Germany, the risk of any damage or loss shifts to the Brazilian pharmaceutical company (buyer). The Brazilian company must then secure insurance for the voyage, pay for the unloading of the chemicals at Santos Port, clear them through Brazilian customs, and arrange for their transport to their manufacturing facility.