Incoterms 2020

CPT Incoterm (Carriage Paid To) – Meaning, Risk & Costs

CPT (Carriage Paid To) under Incoterms 2020: where risk transfers, who pays for carriage, and seller and buyer obligations. Works with any mode of transport.

Rule: CPT – Carriage Paid To (named place of destination)
Transport mode: Any Mode of Transport
Insurance required: No
Export clearance: Seller
Import clearance: Buyer
Main carriage: Seller

Carriage Paid To (CPT) means the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place. The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.

Under CPT, risk transfers when goods are handed over to the first carrier, not when they arrive at the destination. This creates a split between risk transfer point and cost transfer point.

CPT is commonly used for containerized cargo and multimodal transport where the buyer wants the seller to arrange transport but doesn't require insurance.

When risk transfers under CPT

When goods are handed to the first carrier

When costs transfer under CPT

At named place of destination

Seller obligations under CPT

Deliver goods to first carrier
Contract and pay for carriage to destination
Clear goods for export
Provide transport document
Pay loading costs at origin

Buyer obligations under CPT

Accept delivery when goods arrive
Handle import customs clearance
Pay import duties and taxes
Pay unloading costs at destination
Bear risk from first carrier

Who is responsible for what under CPT

Export customs clearance: Seller
Import customs clearance: Buyer
Loading: Seller
Main carriage: Seller
Unloading: Buyer
Delivery to destination: Buyer

Common uses of CPT

Container shipping
Air freight
When seller has better freight rates
Regular supplier arrangements

CPT is best for

When seller has favorable freight contracts
Buyers who want door delivery pricing
Established trade relationships

Risks to watch with CPT

Risk transfers before arrival at destination
Buyer should consider insurance
Unloading costs may be unclear

Frequently asked questions

What does CPT mean in shipping?

CPT stands for Carriage Paid To. Carriage Paid To (CPT) means the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place.

When does risk transfer under CPT?

When goods are handed to the first carrier

Who pays for main carriage under CPT?

The seller pays for main carriage under CPT.

Who handles customs clearance under CPT?

Under CPT, the seller handles export clearance and the buyer handles import clearance.

Is insurance required under CPT?

No. CPT does not require either party to buy insurance, though either may choose to arrange it.