What does Carriage Paid To (CPT Incoterms) mean?

• Carriage Paid To (CPT) is an incoterm that means sellers cover all risks and transportation costs up to the agreed destination.

• Once the good arrived at the agreed delivery point or reach the first carrier, the risks transfer to the buyer.

• The seller is not responsible for any damage that occurs after the shipment reaches the delivery point, which may incentivize the seller to choose the cheapest transportation option without concern for the shipment’s safety.

• The seller is responsible for export clearance.

Once the sales contract is signed, the seller, carrier and buyer are bound to certain shipping logistics obligations. Here are their responsibilities under a Carriage Paid To agreement:

Responsibilities of the Seller under CPT:

• Choosing and arranging the main carriage (carrier) for transporting goods to the named destination.

• Preparing and providing the necessary shipping documents.

• Paying for the transportation of goods to the named destination.

Shift of Responsibility from Seller to Carrier:

Once the sales contract is signed, the seller, carrier and buyer are bound to certain shipping logistics obligations. Here are their responsibilities under a Carriage Paid To agreement:

Buyer's Responsibilities under CPT after Carrier Handover:

• Covering the risk of loss or damage to the goods during transportation.

• Paying for any additional costs incurred after the goods are handed over to the carrier, which may include import duties, taxes, and customs clearance procedures.

These responsibilities can vary based on specific agreements between the sellers and buyers. It's essential to clearly define these responsibilities within the contract to avoid misunderstandings or disputes.

Though CIF and CPT may seem alike, they differ significantly: 

CIF (Cost, Insurance and Freight) is:

• Applicable for sea and inland waterway shipments.

• The seller covers the insurance. 

CPT(Carriage Paid To) is:

• Applicable for sea or flight transportation.

• If the seller does not provide insurance, then the risk transfers to the buyer once the shipment reaches the first carrier. 

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