CARR vs. Cost and Freight

Attribute	CARR	Cost and Freight
Definition	Carrier's responsibility ends at the port of discharge	Seller is responsible for all costs and freight until goods reach the destination port
Transfer of Risk	Risk transfers from seller to buyer once goods are loaded on the vessel	Risk transfers from seller to buyer once goods are loaded on the vessel
Costs	Buyer pays for all costs from port of discharge onwards	Seller pays for all costs and freight until goods reach the destination port
Insurance	Buyer arranges insurance	Seller arranges insurance

Introduction

When it comes to international trade, there are various terms and acronyms that are used to define the responsibilities and costs associated with shipping goods from one country to another. Two common terms that are often used in this context are CARR (Carrier) and Cost and Freight (CFR). While both terms involve the transportation of goods, there are key differences between the two that are important for businesses to understand.

Definition of CARR

CARR, which stands for Carrier, is a term used in international trade to refer to the party responsible for transporting goods from one location to another. The carrier can be a shipping company, airline, or any other entity that is responsible for physically moving the goods. When a shipment is designated as CARR, the carrier is responsible for ensuring that the goods are delivered to the specified destination in a timely and safe manner.

Definition of Cost and Freight

Cost and Freight (CFR) is another common term used in international trade to define the responsibilities and costs associated with shipping goods. When a shipment is designated as CFR, the seller is responsible for paying the costs of transportation to bring the goods to the specified destination. This includes the cost of loading the goods onto the vessel, as well as the cost of transporting the goods to the destination port.

Responsibilities of the Parties

One of the key differences between CARR and Cost and Freight is the division of responsibilities between the parties involved in the shipment. In a CARR arrangement, the carrier is responsible for the physical transportation of the goods, including loading and unloading the goods at the specified destination. On the other hand, in a Cost and Freight arrangement, the seller is responsible for paying the costs of transportation to bring the goods to the destination port, but the buyer is responsible for arranging the onward transportation from the port to the final destination.

Cost Allocation

Another important difference between CARR and Cost and Freight is how costs are allocated between the parties. In a CARR arrangement, the carrier is responsible for all costs associated with transporting the goods, including loading and unloading costs, transportation costs, and any other expenses incurred during the transportation process. On the other hand, in a Cost and Freight arrangement, the seller is responsible for paying the costs of transportation to bring the goods to the destination port, but the buyer is responsible for any costs associated with transporting the goods from the port to the final destination.

Insurance

When it comes to insurance, there are also differences between CARR and Cost and Freight arrangements. In a CARR arrangement, the carrier is typically responsible for insuring the goods during transportation, providing protection against loss or damage. On the other hand, in a Cost and Freight arrangement, the seller is not typically responsible for insuring the goods during transportation, as this is the buyer's responsibility once the goods have been delivered to the destination port.

Conclusion

In conclusion, while both CARR and Cost and Freight are terms used in international trade to define the responsibilities and costs associated with shipping goods, there are key differences between the two. CARR places the responsibility for transportation on the carrier, while Cost and Freight require the seller to pay for transportation costs to the destination port. Understanding these differences is crucial for businesses engaged in international trade to ensure that shipments are handled efficiently and cost-effectively.