What are Group C Terms?

Incoterms explained in simple words

The international Incoterms rules divide delivery terms into four groups based on the level of responsibility assumed by the seller and the buyer:

🔹 Group E – Minimum seller obligations (EXW)
🔹 Group F – Seller delivers goods to the carrier; buyer pays for the main carriage (FCA, FAS, FOB)
🔹 Group C – Seller pays for main carriage, but risk transfers earlier (CFR, CIF, CPT, CIP)
🔹 Group D – Maximum seller responsibility, including delivery to the final destination (DAP, DPU, DDP)

Group C – Main Carriage Paid

Group C terms are used when the seller arranges and pays for the main international transport, but the risk transfers to the buyer once the goods are handed over to the first carrier or loaded on the vessel.

This means the seller covers transportation costs up to the destination country, but the buyer bears the risks during the main carriage.

Typical for long-distance trade, Group C terms help buyers by simplifying logistics, as the seller handles most of the transport arrangements.

CFR – Cost and Freight

Format: CFR [named port of destination]

Definition: The seller arranges and pays for the transport of goods to the named port of destination. However, risk transfers to the buyer once the goods are loaded on the vessel at the port of shipment.

Mode of transport: Sea and inland waterway only.

Example:
A seller in Ningbo (China) ships fuel additives to a buyer in Istanbul. The seller pays for sea freight to Turkey, but once the goods are loaded on the vessel in Alat Port, the buyer bears all risks during the voyage.

CIF – Cost, Insurance and Freight

Format: CIF [named port of destination]

Definition: Same as CFR, but the seller also arranges and pays for insurance covering the buyer’s risk during the sea voyage.

Mode of transport: Sea and inland waterway only.

Example:
A steel exporter from Georgia sells goods to a buyer in Italy under CIF Genoa. The seller covers sea freight and insurance until the goods arrive in Genoa, but risk transfers to the buyer once the goods are loaded on the vessel.

CPT – Carriage Paid To

Format: CPT [named place of destination]

Definition: The seller pays for the carriage of goods to the agreed destination. Risk passes to the buyer when the goods are handed over to the first carrier.

Mode of transport: Any (road, rail, air, sea, multimodal).

Example:
An exporter in Azerbaijan sells textile goods to a buyer in Kazakhstan. The seller pays for rail transport to Almaty, but the risk transfers when the goods are handed over to the railway operator in Baku.

CIP – Carriage and Insurance Paid To

Format: CIP [named place of destination]

Definition: Same as CPT, but the seller must also provide insurance covering the buyer’s risk during transport.

Mode of transport: Any (road, rail, air, sea, multimodal).

Example:
An electronics exporter in Baku ships goods to a buyer in Poland. The seller pays for rail and truck transport and provides insurance coverage. Risk transfers once goods are given to the first carrier in Azerbaijan.

Key Takeaways

•  Seller pays for the main transport
•  Buyer assumes risk once goods are handed over to the first carrier or loaded on the vessel
•  CIF and CIP include insurance arranged by the seller
•  Always specify the named place or port of destination clearly in the contract

Learn more about the Incoterms F group -> https://alliancemultimodal.com/what-are-group-f-terms-2/