Comprehensive guide to understanding Carriage Paid To (CPT) Incoterm: roles, responsibilities, and risk transfer between buyers and sellers.
Seller arranges & pays
Not provided by seller
At origin (first carrier’s point)
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.
Compare CPT with other Incoterms to understand the key differences
Understanding your obligations under CPT (Carriage Paid To) terms
Responsible for transport costs until destination
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 Seller must properly pack and mark the goods for export transportation, ensuring safe delivery. |
||
|
Export Documentation
Required export documents All documentation required for export including licenses and certificates. |
||
|
Main Carriage
International transport costs International transport costs to the named destination, including local charges. |
||
|
Insurance Coverage (Optional)
Buyer arranges own insurance Under CPT, the seller is not responsible for providing insurance coverage. The buyer should arrange for insurance if desired. |
Optional Extra | |
|
Import Clearance
Customs duties and taxes All import duties, taxes, and customs clearance procedures at destination. |
||
|
Destination Handling
Unloading and delivery All costs related to unloading and final delivery at destination. |
||
|
Additional Costs
Extra fees and charges Any additional costs, charges, or fees at destination. |
Important information about risk transfer and liability
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.
Under CPT, the seller does not provide insurance coverage. The buyer is advised to secure their own insurance if needed.
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.
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.
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.
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.
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.
Under CPT, the seller is not required to provide insurance. Buyers should assess their risk and arrange additional coverage if needed.
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.
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.
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.