Carriage Paid To (CPT) is a commonly used Incoterm in international shipping and logistics. 

In this short guide, we look at what Carriage Paid To means, and when it might be used.

 

What does CPT mean?

CPT is short for Carriage Paid To, an International Commercial Trade Term (Incoterm) agreed upon by both the buyer and seller, whereby the majority of risk sits with the seller.

Below we share where responsibilities start and end with CPT shipping.

 

What does the CPT Incoterm dictate?

The CPT Incoterm dictates that:

  1. The seller arranges carriage (can be by one or more transport modes) to the named destination. There is no obligation for goods to be insured by the seller. The risk to the seller ends when the first carrier receives the cargo.

  2. The buyer takes on any risk for the shipment when the first carrier receives the cargo. They are not responsible for any additional shipment costs until after the goods arrive at the named destination.

Top Tip: In multimodal shipments, where CPT is often used, the place of shipment is the first carrier used. A carrier is a person or company that takes on the carriage of goods. 

Common carriers include:

  • Trucking companies

  • Railways

  • Shipping lines

  • Airlines

  • Freight forwarders

 

CPT Shipping Obligations

CPT shipping obligations are very straightforward for the buyer, compared to other Incoterms.

 

Obligations of the buyer

If you are the buyer, you are obligated to:

  • Manage import duties and formalities.

  • Cover the cost of import clearance as part of the pre-shipment inspection.

  • Pay for the goods concerning the sales contract agreed with the seller.



Obligations of the seller

If you are the seller, you are obligated to:

  • Handle commercial invoicing and goods documentation.

  • Manage packaging for export.

  • Manage export marking.

  • Handle pre-carriage and delivery.

  • Cover the cost of loading.

  • Cover the cost of delivery to named place

  • Cover the cost of the pre-shipment inspection.

  • Provide proof of delivery.

 

When to use CPT shipping?

Some shipments benefit more from CPT shipping:

  • Where risk is a worry factor, CPT shipping puts a lot of responsibility at the feet of the seller until the first carrier. This greatly reduces the risk of damaged goods, as the seller will want to take extra care.

  • CPT is ideal where the buyer has little knowledge of export laws where the seller is based. Under CPT, export fees are handled by the buyer, with minimal input needed from the seller.



View the SEKO Guide to Incoterms

Ready to learn more about Incoterms?

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If you’re ready to keep learning, move on to our wider Incoterms blog next, where further questions are answered, and we provide more deep dives into specific Incoterms.

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