Q:

What does the term "CNF price" mean?

A:

Quick Answer

CNF means "cost and freight" or "cost net freight" and a CNF price includes the cost of shipping to the buyer. CNF is a term used in the export business and may also be indicated as C&F or CFR.

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Full Answer

A CNF price is given specific to location. For example, if the buyer is in Chicago and the seller is located in Los Angeles, the CNF Chicago price will include all shipping and freight costs from Los Angeles up to a specified point of delivery. The transfer of risk from the seller to the buyer will depend on this point of delivery. It may, for example, occur at the moment the merchandise leaves the custody of a specified carrier and not necessarily at the moment of delivery into the hands of the buyer.

Since the seller is assuming responsibility for the majority of the shipment, they choose the carrier. In the case of an international shipment, the CNF price includes any customs fees and documentation.

The typical option to the CNF price is the FOB price, which means "free on board." An FOB price does not include freight, which is then assumed by the buyer. As with the CNF, the FOB price specifies a location, being where the merchandise is handed over to a carrier. At that point, the risk switches to the buyer, who has arranged and paid for transport.

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