"Carriage Paid To" (CPT) is an Incoterm where the seller pays the freight charges to transport goods to a specific destination. Unlike similar terms, the risk is transferred to the buyer as soon as the goods are handed over to the first carrier, even though the seller pays for the carriage.

CPT Definition and Scope

CPT requires the seller to clear the goods for export and pay the costs associated with delivering them to the named destination. This term can be used with any form of transport, including multimodal transport.

Seller’s Obligations

  • Arrange and pay for transportation to the agreed destination.\
  • Provide the goods and a commercial invoice in conformity with the contract.
  • Clear the goods for export and handle all associated formalities.

Buyer’s Obligations

  • Pay for any additional costs once the goods have been delivered to the first carrier.
  • Assume all risks and any additional costs arising after the goods have been handed over to the first carrier.
  • Arrange and pay for any insurance from the point the goods are transferred to the first carrier.

Risk and Cost Transfer Points

Risk transfers to the buyer once the goods are handed over to the first carrier, not at the destination. The seller pays for transportation to the destination but not for unloading or onward transportation.

Benefits and Considerations

  • Benefits: Useful for buyers who do not want to arrange for international shipping but want the seller to handle logistics until arrival at the destination.
  • Considerations: Since risk transfers when goods are handed to the first carrier, buyers should ensure proper insurance from this point onwards.

Common Scenarios

  • Ideal for situations where the buyer can handle import duties and other destination charges but prefers the seller to manage the transportation.
  • Often used in industries where transportation logistics are complex, and the buyer wishes to avoid dealing with multiple shipping entities.