Cost and Freight (CFR) - Incoterm Explained in Hindi - YouTube

Subscribe to the Asset Yogi channel

And press the bell

To watch the latest finance videos first

Intro

Namskar, I'm Mukul and welcome to Asset Yogi

Where we don't lock but rather unlock the knowledge of Real Estate and Finance

If you want to import goods from another country

Or for example,

You want to export goods from India to another country

Then it is necessary to understand the term INCO

INCO terms are standard terms

whose full form international commercial terms

According to INCO terms

It is defined that, for the seller exact delivery point is decided

from where the buyer responsibilities start

So waht are the resopnsility in each term,

of the buyer and seller, this is defined in these INCO terms

CFR is also an INCO term like this,

Whose full for is cost & freight

This cost & freight is only used only in sea and river transport

If any good transported through the waterway

from one country to another country

Then only this term will be used

It is not used in any other mode of transport

3 more terms are like this FAS, FOB, CIAF

I will make separate videos on that you can check those videos also

Now if we talk of CFR, in this video we are going to talk in detail

That is what are the exact responsibility of the buyer and seller in CFR

At what point seller handover the cargo to the buyer

And from where the responsibilities of buyer start

Together, what documentation seller handover to the buyer

We will see that too

You must stay in this video from the beginning till last

So that you can't miss the some important point

Let's go straight to the blackboard

In this video, we will learn about CFR

CFR whose full form is cost & freight

This is an INCO term, INCO term mean

These are the international commercial terms

There are 11 definitions of this kind

Which is defined by the international chamber of commerce

The standard is defined for import and export for the cargo of any type

If we understand it from the example then suppose

This is a buyer, Let's say this is a steel factory

Let the factory is in shanghai china

They want to import iron ore from orrisa

Orissa is a place in India

If they want to import iron ore from there

In what ways all the transportation chain is conducted

suppose it export from Vishakhapatnam port to the Shanghai port then travelled from there

So how all this chain is travelled, who bears the cost and till when the seller bears the cost

After, from where the buyer's responsibility starts

For these The INCO terms are defined

And in CFR we will see from where does this responsibility transfer

The delivery point is the most important point in any INCO term

Now in the delivery point, there is the transfer of responsibility cost and risk

Suppose its responsibility which is being transferred on Shanghai port

Then the seller who will be responsible to transport up to there

The cost will be bear by him,

After that, the risk will also be born by him if there is any damage to the goods,

so now we see under cost and freight, until when the responsibility and delivery point is defined

And we understand how this chain operates,

so suppose this seller is exporting iron ore from here

then there is warehouse service or in this case yard services

There are yard handing charges that will have to bear by him

After that he will load the iron ore inside the truck or inside the rail,

now it can be transported by road and it can also be from a rail,

Then those charges also will have to be bear by him

After that, the responsibility of custom clearance and Charges are with him

The Freight Forwarding fee will also have to be paid by him,

To whoever is handling his logistics,

After that, whatever the terminal charges of Vishakhapatnam port

Suppose the iron ore exports from a terminal of Vishakapatnam port,

Even the charges of getting goods, there is also born by the seller

After that, it will be loaded on a ship

and these loading charges will also have to be bear by him

As well as the transportation that will be done from the ocean

The ocean transportation charge will also beared by him

Because now this freight is also written in it, Freight It means ocean Freight

the charges up to here, when it reaches the Shanghai port,

He has to bear up to here

what happens now the responsibilities of the buyer starts

you have seen till the Ocean Freight It was its responsibility of him

Now the ocean freight will be paid by the seller but the risk bear by the buyer

But if the insurance has to be done then it will be done by the buyer

As you can see here the insurance is done by the buyer

After that the unloading on the shanghai port

It will also be the responsibility of the buyer

So from the insurance till now, it is the responsibility of the buyer

But before this, all the responsibility will be of the seller

So after the unloading on the shanghai port,

there will loading on The truck or the rail,

It will transport from the shanghai port to the shanghai factory

It May be possible that it was transported through the truck,

this will also be the responsibility of the only

The buyer needs to clear the customs and to give import duties and taxes

The charges of the transportation will also be bear by the buyer

So this is your delivery point

I will symbolise it as DP

After that, all the charges and responsibilities will be born by the buyer,

So what will be the highlights of the cost and freight?

This term is used only in Sea and inland waterways

This term is used when you want to transport it through Air, Roads, or by Rail

For that case, you will not use this term, For that other terms are given you will use that only,

Some more highlights of CFR is such that

It should be used as Ideal for the bulk cargos

The bulk cargo such as iron ore, grain cargo let say wheat, coal, rice

These are the type of cargo which cannot be packed and containerised

This term is used for non containerised cargo

If you want to send containerised cargo then you must use the CPT term,

The main reason is that when the cargo arrives at the terminal seller will load the cargo

So the container cargo can not be loaded here

So the bulky cargos can be loaded directly

But the type of cargo such as Garment, printers are loaded in the container

They are not loaded in the container generally

they are loaded in the warehouse of the freight forwarder

Or at any other logistic carrier warehouse

In that case, you must use the term CPT

It is not practical in that case you must not use cost and freight

Some other highlights are,

Seller clears the goods for the export and handle the export documentation

Load the cargos on the ship and pays the ocean freights under CFR

For example,

As we have talked about in the case of Iron ore

these types of terms and conditions are written under the contract

"50k tons iron ore CFR terminal XYZ Shanghai China"

This means the cost and freight

The seller will pay till XYZ terminal Shanghai

Till now the cost is included

Whenever a buyer need to pay in form of terms and conditions to the seller

He will pay till CFR XYZ,

So the seller will be responsible till this delivery point

And the buyer will be responsible for the transportation cost and risk, until its arrival

As we have talked earlier the mentioned terms and conditions

The purchase of 50k tons by the buyer

This transportation is included in that,

the seller has included the transportation and risk under its cost,

After that, the buyer has to do its transportation himself

After that, the seller will give all the documentation to the buyer

Such as commercial invoices, Packing lists,

In the case of bulk cargo,

the packing list does not matter and the good packaging certificate

Matters in that cargo

which has the packing on the wood pallet in that case the certificate matters

The most important document is the ocean bill of lading

It is the titled document and is very important

If the OBL does not handover then it may cause difficulties in loading

That is why it is important for the buyer must clear all the payments of the buyer

Because without the passing of the title the cargo will not be loaded

After the payments of the seller clear only after that,

the OBL is handover to the buyer by the seller

I think I have covered all the major points in the cost and freights

Other than cost and freight The term CIF is also used,

I will cover it in my next video

You must watch that video

I hope you liked the video

Like and share it,

If you have any suggestions and want to give any feedback

Or want to share your experience so please comment down below,

I bring Similar videos related to Finance and investments every day

So please subscribe for the latest video notification,

And press the bell icon on your phone

We will meet in the next video

Till then keep learning, keep earning and as always Be happy.