Incoterms 2020
CPT, Carriage Paid To
The seller pays the freight to the named destination, but risk passes much earlier, when the goods are handed to the first carrier. That split catches people out.
- Group
- C
- Mode
- Any mode of transport
CPT is the first rule where cost and risk part company, and understanding that split is the whole point of the rule. The seller contracts and pays for carriage to the named destination. However, risk transfers to the buyer as soon as the goods are handed over to the first carrier, which may be a local trucker collecting from the factory.
The practical consequence is that if goods are damaged halfway through a journey the seller has paid for, it is the buyer who bears the loss. The buyer is paying indirectly for transport they do not control, while carrying risk on it. If that matters, CIP adds insurance, or DAP moves risk to destination.
The seller is responsible for
- Clear the goods for export
- Contract and pay for carriage to the named destination
- Deliver the goods to the first carrier
- Provide the transport document and commercial documents
The buyer is responsible for
- Bear risk from the moment the goods reach the first carrier
- Pay unloading costs at destination unless included in the carriage contract
- Arrange insurance if wanted, as none is required
- Handle import clearance, duty and taxes
Risk transfers
When the goods are handed to the first carrier, not at the destination.
Costs transfer
At the named destination, which the seller pays to reach. Two different points.
Best used for
Sellers who want to control the routing and offer a delivered price, on goods where transit damage is unlikely.
Watch out for
Risk and cost transfer at different places. Name both the delivery point and the destination if there is any doubt.
Related services
Tell us what you need to move.
Send the supplier city or port of loading, the volume and weight, and the date the goods are ready. We will come back with a landed cost and a realistic transit time, usually within one working day.