Incoterms CPT: Carriage Paid To

Named Place Requirement: Place of Destination

The transfer of risk and cost from seller to buyer occur at different points.

Carriage Paid To (CPT) rules require the seller to clear the goods and arrange carriage (by one or more transport modes) to the named place of destination. The seller does  need to obtain or pay for insurance.

A carrier is any person or company who undertakes the carriage of the goods, such as a shipping line, airline, trucking company, railway or freight forwarder.

In multimodal shipments, the place of shipment is the first carrier used.

Under CPT rules, the seller’s risk ends, and the buyer’s risk begins, when the first carrier receives the goods from the seller. However, the buyer is only responsible for additional costs after the goods arrive at the final destination.

CPT is often used in air freight, containerized ocean freight, small parcel shipments and “ro-ro” shipments of motor vehicles.

CPT Incoterm Obligations

Seller’s Obligations

• Goods, commercial invoice and documentation
• Export packaging and marking
• Export licenses and customs formalities
• Pre-carriage and delivery
• Loading charges
• Cost of delivery at named place of destination
• Proof of delivery
• Cost of pre-shipment inspection

Buyer’s Obligations

• Payment for goods as specified in sales contract
• Import formalities and duties
• Cost of import clearance pre-shipment inspection

The CPT (Carriage Paid To) rule requires the seller to deliver the goods to its carrier but
does not indicate whether that is either at the seller’s premises loaded onto the collecting
vehicle or delivered to another premises not unloaded from the seller’s vehicle. The seller
must carry out any export formalities and the buyer carries out any import formalities. It is
the seller’s responsibility to contract for carriage and of course the cost of that will be built
into the selling price. Like FCA, the risk transfers to the buyer immediately when delivery
has been made, This rule works well for land transport within the Europe/Central Asia
landmass, because often the truck collecting the goods will be the one transporting the
goods to the destination.
The CPT rule has two important places, the place of delivery in the seller’s country and the
destination to where the seller contracts the carriage. It is important to not confuse the
two.
Despite being recommended in place of CFR for cross-ocean container shipments this
rule in practice is largely unworkable for them. This is because in such shipments the buyer
wants to only take on the risk of damage or loss of the goods when they have actually been
exported. Initially the buyer is not only unaware of when or where delivery has occurred
but also to whom, as it will be the seller’s carrier. They don’t want to be faced with any
possibilities of having to deal with any problems whatsoever in the exporting country. The
seller has no obligation to put the goods on board a ship by a given date, but as it is using
its own contracted carrier it should be easily able to obtain an on board bill of lading.

Get CPT guidance from  a TS-Trade Specialist

Any excerpts quoted from the Incoterms® 2020 rules are the copyright of the International Chamber of
Commerce. Source: ICC website. The full text of the 2020 edition of the Incoterms rules is available at
https://2go. iccwbo.org/. The word “Incoterms” is a registered trademark of the International Chamber of Commerce.