CPT Incoterms 2020: Carriage Paid To

Under CPT the seller pays the transport to the named place of destination, but the risk passes to the buyer when the goods are handed to the first carrier at origin.

CPT Carriage Paid To

Any mode of transport

Compare with

Step	CPT
Export packing and marking	Seller
Loading at the seller's premises	Seller
Export customs clearance	Seller
Transport to the port or terminal	SellerRisk passes to the buyer here
Terminal charges and loading at origin	Seller
Main carriage (ocean or air freight)	Seller
Cargo insurance	Not required by the rule
Unloading at destination terminal	Buyer, unless in the freight contract
Transport to the named place	Seller, to the named place
Unloading at the named place	Buyer
Import clearance, duties and taxes	Buyer

CPT: Risk passes: When the goods are handed to the first carrier, at origin, even though the seller pays carriage to destination.; Costs: The seller pays carriage to the named place of destination. The buyer pays import costs.

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What does CPT mean?

CPT (Carriage Paid To) means the seller hands the goods to the carrier it has contracted and pays the transport to the named place of destination. Risk passes to the buyer as soon as the goods are handed to the first carrier, at origin. CPT works for any mode of transport, including containers, air, road, rail and multimodal journeys.

Two critical points under CPT

Risk passes at delivery to the first carrier, in the seller's country.
Cost runs to the named place of destination, which the seller pays for.

Because the delivery point is not in the rule's name, it helps to state it in the contract: "CPT Warehouse 5, Rotterdam, Incoterms® 2020, delivery at Container Terminal Shekou". Otherwise risk passes when the goods reach the first carrier, wherever that is.

Seller and buyer obligations under CPT

Seller	Buyer
Contracts and pays carriage to the named destination	Bears the risk from delivery to the first carrier
Clears export and pays export fees	Insures the goods if it wants cover (no obligation either way)
Provides the usual transport document and commercial invoice	Pays unloading at destination, unless the carriage contract includes it
Notifies the buyer that the goods are delivered	Clears import and pays duties and taxes

Example

A Chinese electronics maker sells "CPT Nairobi Inland Container Depot, Kenya, Incoterms® 2020". It hands the container to the shipping line at Shenzhen and pays ocean freight and rail to Nairobi. When the line receives the container in Shenzhen, the risk is the buyer's. The buyer insures the journey and clears import in Nairobi.

CPT vs CFR and CPT vs CIP

CPT is the any mode version of CFR: same idea, but risk passes at the first carrier instead of on board a ship, so it fits containers and air freight. CIP is CPT plus an obligation for the seller to buy all risks insurance. Choose CPT when the buyer prefers to insure locally or already has an annual cargo policy.

Watch out for

Destination charges. If the seller's freight contract includes unloading or terminal charges at destination, the seller pays them and cannot recover them from the buyer unless agreed.
Insurance gaps. The buyer carries the risk for the whole main journey. Make sure cover starts at the first carrier.

Whatever the rule, the seller provides a commercial invoice that names the Incoterm and place, and usually a packing list. For quotes before the order, use a proforma invoice with the same rule written on it.

Features

Who does each step under CPT
Where risk passes, marked on the chart
Compare CPT with CIP, CFR or any other rule
Link to the Incoterms chooser

Frequently asked questions

What does CPT mean in shipping?

CPT means Carriage Paid To. The seller pays the transport to the named place of destination, but the risk passes to the buyer when the goods are handed to the first carrier.

Who pays insurance under CPT?

Neither party is obliged to insure. The buyer bears the risk during the main journey, so the buyer usually insures. Under CIP the seller must insure.

What is the difference between CPT and CIP?

Insurance. CIP adds a seller obligation to buy all risks cargo insurance for the buyer. Otherwise the two rules are the same.

Can CPT be used for sea freight?

Yes. CPT works for any mode, including sea. For containers it is recommended over CFR.

Where does risk transfer under CPT?

At the point of delivery to the first carrier, usually in the seller's country, not at the named destination.

CIP: Carriage and Insurance Paid ToUnder CIP the seller pays the transport and all risks cargo insurance to the named destination. Risk passes to the buyer when the goods are handed to the first carrier.DAP: Delivered at PlaceUnder DAP the seller delivers the goods to the named destination, ready for unloading, at its own cost and risk. The buyer unloads and handles import clearance, duties and taxes.DPU: Delivered at Place UnloadedUnder DPU the seller delivers the goods to the named destination and unloads them there, at its own cost and risk. The buyer clears import and pays duties and taxes.DDP: Delivered Duty PaidUnder DDP the seller delivers the goods to the named destination cleared for import, with duties and taxes paid. It is the most the seller can take on under any Incoterms rule.