CPT (Carriage Paid To)

Incoterms, also known as international commercial terms, are set to eliminate or decrease confusions and conflicts between buyers and sellers in international trade and to facilitate the trade and commerce process globally. Incoterms were created by the International Chamber of Commerce (ICC) in 1936 and since then, they are updated on a regular basis to suit changing trade trends.
EXWFCACPTCIPDAPDPUDDPFASFOBCFRCIF
Free CarrierCarriage Paid ToCarriage Insurance Paid ToDelivered at PlaceDelivered at Place UnloadedDelivered Duty PaidFree Alongside ShipFree On BoardCost & FreightCost, Insurance & Freight
Charges/FeesEx Works
At a named place, the seller transfers the goods to the buyer; the buyer is responsible for all risks.1.) when seller loads goods to buyer’s carrier or 2.) when goods are at the buyer’s disposal & ready for unloading at a named placedwhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are handed over to the seller’s nominated carrier at a named placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen the goods are delivered and unloaded at a named place or agreed point within that placewhen the goods are placed at the buyer’s disposal at a named place or agreed point within that placewhen goods are alongside the vessel nominated by the buyer at named portwhen goods are on board the vessel nominated by the buyer at named portwhen the goods are on board the vessel nominated by the seller at originwhen the goods are on board the vessel nominated by the seller at origin
Risks Transfer
Commercial InvoiceSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Packaging & QCSellerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Loading & DeliveryBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Export Duty & TaxesBuyerSellerSellerSellerSellerSellerSellerSellerSellerSellerSeller
Origin Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerSellerSellerSeller
Cargo InsuranceNegotiableNegotiableNegotiableSellerNegotiableNegotiableNegotiableNegotiableNegotiableNegotiableSeller
Carriage ChargesBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerSellerSeller
Destination Terminal HandlingBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Delivery to DestinationBuyerBuyerSellerSellerSellerSellerSellerBuyerBuyerBuyerBuyer
Unloading at DestinationBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyerBuyer
Import Duty & TaxesBuyerBuyerBuyerBuyerBuyerBuyerSellerBuyerBuyerBuyerBuyer
Incoterms 2020
CPT

CPT, or Carriage Paid To, is an Incoterm that means the cost of the goods covers everything needed to deliver the goods to the agreed-upon location. Only import regulations, local delivery, and unloading charges are the buyer’s responsibility.

Once the products are delivered to the first carrier, which is normally at the origin port, the shipment’s liability is transferred. CPT is similar to an FCA agreement in that it can be used for all modes of transportation; but, unlike FCA, the delivery point is not a specific place. While CPT is not a commonly used Incoterm, it can be useful in some instances.

Because the buyer and seller must designate two central locations, which are not necessarily obvious, CPT may be a confusing Incoterm. The delivery place and the destination are the two points that must be established under a CPT agreement.

When the seller hands over goods to their contractual carrier, the cargo is transported to the buyer. The buyer’s risk begins at this stage. The seller is also responsible for the cost of shipping the freight to its final destination. The seller is still responsible for completing the shipment until it reaches the agreed-upon destination, even if the shipping risk and obligation have been passed to the buyer.

Seller’s Responsibility Under CPT

  • Packaging and marking
  • Delivery of goods to the carrier in the country of origin
  • International freight
  • Handling import customs clearance
  • Preparing commercial invoice
  • Clearing goods for export
  • Transportation of goods in the country of origin
  • Paying goods-related charges and customs duties
  • Bearing the risk of damage or loss until delivery

Buyer’s Responsibility Under CPT

  • Payment of goods
  • Clearing goods for import
  • Transportation of goods in the destination country
  • All costs after delivery, including transit and unloading costs
  • Bearing the risk of damage or loss after handing over the goods to the carrier

Cargo Insurance in CPT

The point of delivery is critical because it is at this point that the goods are handed over to the carrier and the risk is passed to the buyer. The buyer will have no influence over where this is done if it hasn’t been stated earlier. However, if the transaction involves more than one carrier, the risk transfer can be done at a later or even earlier stage by stating it in the contract of sale.

It is also strongly advised that both parties specify the destination in the contract, as this is the point at which the seller must arrange the carriage and the point at which the seller is responsible for carriage charges.

FAQ

What does CPT mean?

CPT, or Carriage Paid To, covers the cost of the goods and anything needed to deliver the goods to the agreed location.

Is CPT similar to FCA?

CPT is similar to an FCA agreement in that it can be used for all modes of transportation; but, unlike FCA, the delivery point is not a specific place.

Who takes the risk of damage under CPT?

The seller takes the risk of damage until delivery and the risk is transferred to the buyer after handing over the goods to the carrier.

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