Definition
What is CNF in shipping?
CNF (Cost and Freight) is a shipping term that dictates that the seller is responsible for covering the cost of transporting goods to the destination port. The important distinction with CNF shipping is that the risk transfers to the buyer as soon as the goods are loaded onto the ship at the origin port. Any damage or loss during transit is the buyer's responsibility, even though the seller still covers the cost to get the goods to the destination.
Use case
CNF Incoterms are typically used for sea freight or inland waterway transport, making them ideal for bulk shipments or large-volume cargo. Unlike CIF (Cost, Insurance, and Freight), which includes insurance in the seller's responsibilities, CNF leaves insurance up to the buyer.
How it works
How does the CNF Incoterm work?
Under CNF Incoterms, the seller must arrange and pay for the transportation of goods to the agreed port of destination. However, their responsibility ends once the goods are safely loaded onto the ship. From that point onward, all risks—such as damage or loss—fall on the buyer, who also assumes all costs incurred from the moment the goods reach the destination port.
Risk & cost transfer timeline
[Seller warehouse] —(seller arranges & pays freight)—> [ship at origin port] —(risk & all post-loading costs transfer here)—> [destination port] —(buyer handles customs, duties, insurance & inland delivery)—> [final destination]
Responsibilities
Buyer and seller responsibilities in CNF shipping
Seller responsibilities
- ✓Packing and labeling products in line with international shipping standards
- ✓Arranging export customs clearance at the point of origin
- ✓Covering the cost of freight to the destination port
- ✓Ensuring the goods are loaded onto the ship safely
Buyer responsibilities
- ✗Risk of loss or damage once goods are loaded onto the vessel
- ✗Paying import customs clearance, duties, taxes, and additional port charges upon arrival
- ✗Arranging and covering transport from the port to the final destination
- ✗Opting for insurance to cover the goods in transit, as CNF does not include insurance
Costs
CNF pricing: what you need to know
When dealing with CNF pricing, the price quoted by the seller covers only the cost of the goods and shipping to the destination port. The final cost you pay is often higher due to additional charges at the destination, including customs duties, taxes, and port fees.
How to calculate the CNF price
- Initial CNF price: the seller's price includes the cost of goods plus shipping to the destination port.
- Additional charges: once goods arrive, the buyer pays customs duties, taxes, and any handling or port fees.
- Final cost: the seller's CNF price plus all costs incurred after arrival at the destination port.
Hidden costs with CNF pricing
While CNF covers freight to the destination port, it does not include import duties, VAT, port handling charges, customs clearance fees, or warehouse storage fees. These must be factored into your overall shipping budget.
Landed-cost breakdown: FOB shipping point vs destination · Chargeable weight & CBM
Compare
CNF vs other Incoterms: key differences
FOB vs CNF
Under FOB, the seller's responsibility ends once goods are loaded at the origin port, and the buyer covers freight, insurance, and import duties from that point. Under CNF, the seller covers freight to the destination port, but the buyer assumes risk once goods are loaded and manages insurance and all post-arrival costs.
CIF vs CNF
Both are used in sea freight. The key difference is insurance: CIF has the seller cover goods, freight, and insurance during transit; CNF covers goods and freight only, leaving the buyer to arrange insurance if needed.
EXW vs CNF
EXW (Ex-Works) places the most responsibility on the buyer—picking up goods from the seller's premises and arranging export clearance. CNF shifts logistics to the seller, who arranges and pays freight to the destination port, while the buyer takes on risk once goods are loaded onto the ship.
Full Incoterms comparison: Incoterms 2020 explained
Variations
Special cases and variations in CNF Incoterms
Variations: can you add clauses?
Yes. You can add a "stowed" clause requiring the seller to properly stow goods on the vessel, plus negotiate other terms such as VAT payment responsibilities.
Can CNF be used for air freight?
No. CNF is specific to sea freight or inland waterways. For air freight, CPT (Carriage Paid To) or CIP (Carriage and Insurance Paid To) are more appropriate.
Does CNF include unloading?
No. CNF shipping does not cover unloading at the destination port. The buyer arranges and pays for any unloading fees.
Does CNF work with Letters of Credit?
Yes. The seller must provide the necessary shipping documents to the bank to receive payment under the LC, often including a bill of lading proving the goods were shipped.
Scenarios
Specific shipping scenarios with CNF Incoterms
Can you use CNF for Alibaba purchases?
Yes, CNF can be used on Alibaba or other online B2B platforms. Communicate clearly with the seller about who will handle insurance, customs clearance, and other post-arrival responsibilities.
Who chooses the freight forwarder in CNF?
The seller usually chooses the forwarder since they arrange and pay for shipping to the destination port. The buyer can still hire an agent for customs clearance and inland transportation at destination.
Can you pick up a CNF shipment yourself?
Yes. You must handle customs clearance and pay any associated fees before taking possession of the goods at the destination port.
Is CNF shipping suitable for your business?
CNF works well when you want the seller to handle transportation to the destination port but are prepared to manage risks and costs upon arrival. It is cost-effective for buyers comfortable with post-vessel risk, simplifies the seller's logistics, and suits bulk shipments. If you prefer insurance included or want the seller to manage risk until arrival, CIF may fit better.
FAQ
Frequently asked questions
What is the difference between FOB and CNF?
What is the difference between CIF and CNF?
Does the CNF price include duty?
Can you use CNF for air freight?
Does CNF include unloading?
Why us
Final thoughts: should you use CNF Incoterms?
CNF Incoterms offer a balanced approach for international trade, allowing the seller to manage transportation to the destination port while shifting risk and post-arrival costs to the buyer. It is ideal for buyers who can handle customs clearance and prefer flexibility in managing their own insurance.
By understanding the cost structure, risk transfer, and responsibilities associated with CNF shipping, you can make informed decisions that benefit your business and streamline your international trade operations.
For expert advice on your next CNF shipment or any Incoterm—contact Super International Shipping for a free quote.
Get expert advice & a free quote →Related: Shipping documents from China · FOB shipping point vs destination · Amazon international shipping