Incoterms and shipping
CPT (Carriage Paid To)
Definition
The seller pays carriage to the named destination, but risk passes when the goods are handed to the first carrier.
CPT at a glance
- Transport
- Any mode
- Risk passes
- When the goods are handed to the first carrier, usually at origin
- Insurance
- No obligation
CPT is a two point rule. The seller contracts and pays for carriage to the named place of destination, yet the risk of loss or damage passes to the buyer when the goods are handed to the first carrier in the seller's country. The buyer handles import clearance and duties.
Because the risk passes early, buyers on CPT terms often arrange their own cargo insurance.
Related terms
- CIP (Carriage and Insurance Paid To)Like CPT, with the seller also buying cargo insurance, at the all risks level of Institute Cargo Clauses (A) under Incoterms 2020.
- Incoterms 2020The ICC's eleven standard trade terms that set who pays for and bears the risk of each step of delivery.
- CFR (Cost and Freight)The seller pays sea freight to the named destination port, but risk passes when the goods are on board at the port of shipment.