What is CPT (Carriage Paid To)?

Carriage Paid To (CPT) is an international trade term (Incoterm) that means the seller delivers the goods at their expense to a carrier or another person nominated by the seller. The seller assumes all risks, including loss, until the goods are in the care of the nominated party. The carrier could be the person or entity responsible for the carriage (by sea, rail, road, etc.) of the goods or the person or entity enlisted to procure the performance of the carriage. The CPT price might include Terminal Handling Charges (THC) in their freight rates.

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Key takeaways:

The seller is responsible for bringing the goods to destination.

The transfer of risk is made when the goods have been handed over to the carrier.

The seller is responsible for contract for the carriage of the goods from delivery to the agreed final destination.

The CPT Incoterm is versatile as it can be used for all modes of transportation and may also be used where more than one mode of transport is employed.

The buyer is also responsible for import costs, taxes, duties, and insurance throughout the carriage.

CPT is generally used in containerized ocean freight, air freight, and small parcel shipments.

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Seller's obligations under the CPT Incoterm:

1.Quality control (measuring, weighing, counting, etc. ); packing and labeling (unless special conditions exist due to the nature of the goods)

2.At the chosen place of delivery and on the scheduled day, hand over the goods to the seller's contracted carrier, together with the customary transport documents or those required by the nature of the transaction.

3.Until delivery, seller is responsible for any loss or damage.

4.Clear goods for export and help buyers in getting necessary documentation and information for import clearance.

5.Notify the buyer of delivery and provide any notification necessary to receive the goods in accordance with the contract of sale, as well as provide the goods and commercial invoice in accordance with the contract of sale.

6.The seller is not required to make an insurance contract, but is required to disclose information if the buyer wants it in order to get insurance.

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Buyer's obligations under the CPT Incoterm:

1.Pay the agreed-upon price for the goods in the contract of sale.

2.From the time the goods are handed over to the carrier by the seller, buyer is responsible for any risks of loss or damage.

3.Clear goods for import and help with export clearance for the seller.

4.Give the seller sufficient notice of the time for dispatching and/or receiving the goods, if agreed.

5.The buyer is under no obligation to make a contract of insurance.

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The difference of CPT and Cost, Insurance, and Freight (CIF):

According to Incoterms, CIF only applies to maritime shipping. Up until the goods are loaded on the shipping vessel at port, the seller is responsible for the costs, insurance, and freight for transporting the goods. The buyer is responsible from that point on.

The CPT, on the other hand, covers a wide range of shipping methods, including land, air, and sea, and only holds the seller responsible until the goods are delivered to the first carrier in the transportation process.