Incoterms: CPT – Carriage Paid To

Education Incoterms 2000 3 comments

CPT “ Carriage Paid To “ is an incoterm that can be used for any kind of shipment. CPT is somewhat similar to CFR and CIF with some differences.
In CPT, like CIF, the seller/exporter arranges for the goods to be delivered to the named port of destination. Unlike both CFR and CIF, the seller’s risks end the moment the goods have been delivered to the carrier. Because this incoterm can be used for any mode of transport, a carrier in this case could be a steamship line, a trucker, a railroad, or a freight forwarder. The seller is responsible for all costs until the goods have been delivered to the named port of destination. In this case, the named port of destination is domestic to the buyer, meaning that the named port must be a port in the buyer’s country, however unlike other similar incoterms the named port of destination is not necessarily the final delivery point: it could be, but it could also be an agreed upon point at the port of destination. So if you were selling cherries to Thailand (can you tell I like this example?) you would use the term “CPT, Carriage Paid to Laem Chabang Port, Thailand” however Laem Chabang might or might not be the final delivery point at the port of destination.

Under CPT terms, the seller’s risks end the moment the goods are handed over to the carrier but the seller is responsible for all costs up to the named port of destination :

Seller’s Responsibilities:
1) Produces the goods and commercial documents as required by the sales contract.
2) Arranges for export clearance and all export formalities.
3) Arranges and pays for all costs for the transportation of the goods up to the agreed point in the named port of destination.
4) Assumes all risk to the goods (loss or damage) only up to the point they have been turned over to the carrier. Seller is under no obligation to buy insurance. SPECIAL NOTE: While the seller has no obligation to insure the goods and may not be legally responsible for the goods once they are with the carrier, he may have a vested interest in the goods during the voyage. It may be a wise decision to purchase additional insurance coverage in the case of a loss.
5) Seller must advise the buyer that the goods have been delivered to the carrier.
6) Seller has to provide the buyer with transport documents that will allow the buyer to take possession of the goods at the agreed point in the named port of destination.

Buyer’s Responsibilities:

1) Buyer must pay for the goods as per the sales contract
2) Buyer must obtain all commercial documentation, licenses, and authorizations required for import and arrange for import clearance and formalities at own risk and cost.
3) Buyer takes delivery of the goods after they have been delivered by the seller to the agreed point in the named port of destination.
4) Buyer must assume all risks for the goods from the time the goods have been handed over to the carrier. SPECIAL NOTE: While neither the seller or the buyer are required to insure the shipment, the buyer may have a vested interest in the goods during the voyage. It may be a wise decision for the buyer to purchase additional insurance coverage in the case of a loss.
5) Buyer pays for all costs of transportation, import customs formalities and duty fees, and all other formalities and charges related to the transportation of the shipment from the time the goods have been delivered to the agreed point in the named port of destination.
6) Buyer would accept the seller’s transport documents provided they conform with the sales contract and will allow the buyer to take possession of the goods after delivery to agreed point in the named port of destination.

This interpretation is provided as a guide only.

Incoterms are published by the International Chamber of Commerce and are available on their website and official publication “Incoterms 2010″. For a complete and official overview please refer to the ICC’s publication.

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About The Author: Co-Contributor

  • Nikolaos Lasithiotakis March 23, 2011, 9:58 am

    Very helpful!!!!

  • camellia July 19, 2011, 2:34 am

    many thanks for your definitions.

  • Godson March 29, 2013, 6:06 pm

    It was extremely helpful

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