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CPT Incoterm: Definition & Responsibilities

Comprehensive guide to understanding Carriage Paid To (CPT) Incoterm: roles, responsibilities, and risk transfer between buyers and sellers.

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Based on Latest Incoterms® 2020 Rules
Updated for Trade Practices
Real Case Studies Included
modern minimalist infographic showing CPT Incoterm

Transport

Seller arranges & pays

Insurance

Not provided by seller

Risk Transfer

At origin (first carrier’s point)

What is the CPT Incoterm? ( Definition)

CPT means the seller pays for international transportation only, while the risk transfers to the buyer at the first carrier point.

CPT (Carriage Paid To) is an international trade term where the seller arranges and pays for transportation to the agreed destination, but the risk transfers to the buyer once the goods are handed over to the first carrier. Unlike CIP, insurance is not provided by the seller.

Seller's Cost & Risk (Until First Carrier) Risk Transfer Point Buyer's Risk
Seller's Responsibility Zone Costs Covered
Step 1

Export Preparation

  • • Packaging
  • • Documentation
  • • Export Clearance
Step 2

Pre-Carriage

  • • Loading at Origin
  • • Inland Transport
  • • To First Carrier
Risk Transfer Point

Main Transport

  • • International Carriage
  • • Until Destination
Buyer's Zone Risk & Costs

Import Clearance

  • • Import Duties
  • • Customs Clearance
  • • Port Charges

Final Delivery

  • • Unloading
  • • Local Transport
  • • To Destination

Seller Pays For

  • Export clearance & documentation
  • Loading at origin
  • Pre-carriage to first carrier
  • Main carriage to destination

Buyer Pays For

  • Import duties & taxes
  • Import clearance costs
  • Unloading at destination
  • Bears risk from first carrier
  • Additional insurance (optional)

Want to learn more?

Compare CPT with other Incoterms to understand the key differences

CPT vs CIF Comparison

CPT Incoterm: Seller vs. Buyer Responsibilities

Understanding your obligations under CPT (Carriage Paid To) terms

Seller's Key Obligations

Responsible for transport costs until destination

Buyer's Key Obligations

Handles import clearance and assumes risks after the first carrier; responsible for arranging insurance if desired.

Responsibility Seller Buyer
Export Packing & Marking

Proper packing for export transport

Export Documentation

Required export documents

Main Carriage

International transport costs

Insurance Coverage (Optional)

Buyer arranges own insurance

Optional Extra
Import Clearance

Customs duties and taxes

Destination Handling

Unloading and delivery

Additional Costs

Extra fees and charges

What Happens if the Goods Are Damaged During Transport?

Important information about risk transfer and liability

Risk Transfer Point

Risk transfers to the buyer when goods are handed over to the first carrier, even though the seller continues to arrange and pay for transport.

Insurance Protection

Under CPT, the seller does not provide insurance coverage. The buyer is advised to secure their own insurance if needed.

Claim Process

The buyer can file claims directly with their insurance provider. The seller may assist if previously agreed, but is typically not involved under CPT terms.

Required Documentation

  • Bill of Lading
  • Damage Report

Time Limitations

  • Report damage within 3 days (may vary depending on carrier and policy)
  • File claim within 30 days (subject to insurer's conditions)
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CPT vs CIF, FOB, DDP & EXW: Key Differences

Responsibility

CPT

CIF

FOB

DDP

EXW

Main Transport
Seller to destination
Seller to port of destination
Buyer from port of loading
Seller to final destination
Buyer arranges pickup at origin
Insurance
Not provided
Seller (Marine only)
Buyer arranges insurance
Seller (optional)
Buyer responsible
Risk Transfer
At first carrier
At loading port
At loading port
Upon delivery to buyer
Immediately upon pickup
Export Clearance
Seller
Seller
Seller
Seller
Buyer*
Import Clearance
Buyer
Buyer
Buyer
Seller
Buyer
Duties & Taxes
Buyer
Buyer
Buyer
Seller
Buyer
Typical Usage
Ideal for multimodal shipments with seller-arranged transport (no mandatory insurance)
Common for sea freight of bulk cargo with marine insurance
Buyer-controlled shipping & insurance
Seller manages door-to-door delivery including customs
Buyer assumes all responsibilities from origin

When and why should you choose CPT over CIF, FOB, DDP or EXW?

What is the key difference between CPT and CIF?

Under CPT, the seller arranges transport to the final destination without providing insurance, while CIF covers transport to the port of arrival along with mandatory maritime insurance.

When should I choose CPT instead of DDP?

Choose CPT when you want the seller to arrange and pay for transport only, leaving import clearance, duties, and insurance arrangements to the buyer. DDP is preferable when the seller manages the entire delivery process.

What benefits does CPT offer for multimodal transport?

CPT is ideal for multimodal shipments as the seller arranges comprehensive transport to the final destination without the added complexity of insurance, simplifying the logistics process for the buyer.

How are customs responsibilities allocated under CPT?

In CPT, the seller handles export clearance while the buyer manages import clearance, similar to other terms where risk transfer occurs at the first carrier.

What additional insurance options are available under CPT?

Under CPT, the seller is not required to provide insurance. Buyers should assess their risk and arrange additional coverage if needed.

What are common pitfalls when using CPT terms?

Common pitfalls include misinterpreting the risk transfer point and neglecting to secure appropriate insurance since the seller’s obligation stops at transport. It is crucial for both parties to clearly define their responsibilities in the contract.

What documentation is required for a CPT shipment?

Typical documentation under CPT includes the commercial invoice, packing list, export license (if applicable), and the bill of lading or airway bill to confirm transport arrangements. An insurance certificate is not mandatory under CPT.

How can disputes regarding CPT terms be resolved?

Disputes under CPT terms are usually resolved through negotiation between the parties. If necessary, mediation or arbitration (as outlined in the contract) can be used to settle disagreements regarding responsibilities or claims.