CPT: Carriage Paid To (Incoterms® 2020)
CPT (Carriage Paid To) means the seller pays the freight to the named destination, but risk passes to the buyer much earlier, when the goods are handed to the first carrier in the seller's country.
Quick facts
Where risk and costs pass from the seller to the buyer
SellerBuyer
How to write it
CPT + the named place of destination + Incoterms 2020, for example: CPT Lagos Incoterms 2020. It is wise to also state where delivery happens, such as "delivery at Incheon Airport".
What the seller does
- Clears the goods for export.
- Contracts and pays for carriage to the named destination.
- Hands the goods to the first carrier, which is when delivery and risk pass.
- Gives the buyer the usual transport document and tells it the goods are on their way.
What the buyer does
- Takes the risk from the handover to the first carrier.
- Insures the goods in transit if it wants cover; it is not required.
- Pays unloading at destination unless the seller's carriage contract includes it.
- Clears the goods for import and pays duties and taxes.
When to use it
CPT suits containers, air freight and multimodal transport when the seller can get good freight rates but does not want to carry transit risk. It is the any-mode version of CFR.
Common mistakes
- The buyer thinking the seller carries the risk until arrival. The seller pays the freight, but the buyer carries the risk in transit and should insure.
- Naming only the destination. Because risk passes at origin, agree where exactly the goods are handed over.
- Arguing later about destination charges. Costs that the seller's carriage contract covers stay with the seller.
CPT vs CIP
They are identical except that under CIP the seller must also buy insurance for the buyer's benefit, with all-risks ICC (A) cover. Choose CIP when the buyer expects insured goods, or when a letter of credit requires an insurance document.
Seller and buyer obligations, article by article (A1–A10 / B1–B10)
Incoterms 2020 gives each side ten matching articles. Here they are in plain language; the ICC text and your contract decide.
| Seller (A) | Buyer (B) | |
|---|---|---|
| A1/B1 General obligations | Provide the goods and the commercial invoice as the contract requires, plus any other proof of conformity it asks for. Documents may be paper or electronic if agreed or customary. | Pay the price as the contract requires. Documents may be paper or electronic if agreed or customary. |
| A2/B2 Delivery and taking delivery | Deliver by handing the goods over to the carrier the seller has contracted, at the agreed point at the place of delivery, or procure goods so delivered. | Take delivery when the goods are handed to the first carrier, and receive them from the carrier at the named place of destination. |
| A3/B3 Transfer of risks | Bears all risk until the goods are handed to the first carrier, even though it pays freight to destination. | Bears all risk from that handover, so loss in transit is the buyer's risk. |
| A4/B4 Carriage | Contract or procure carriage on usual terms, by a usual route and in the customary manner, from the place of delivery to the named place of destination; meet transport-related security requirements. | No obligation to the seller. |
| A5/B5 Insurance | No obligation to insure. At the buyer's request, risk and cost, give the information the buyer needs to buy insurance. | No obligation to insure. The buyer bears the risk from delivery, so it usually buys cargo insurance for itself. |
| A6/B6 Delivery or transport document | If customary or requested, provide at its cost the usual transport document for the agreed carriage. Where agreed or customary, it must let the buyer claim the goods at destination and sell them in transit; a negotiable document in several originals goes to the buyer as a full set. | Accept the transport document if it conforms to the contract. |
| A7/B7 Export and import clearance | Carry out and pay for export clearance. Where applicable, help the buyer, at its request, risk and cost, with documents and information for transit and import clearance. | Carry out and pay for transit and import formalities. |
| A8/B8 Checking, packaging, marking | Pay for the checks (quality, measuring, weighing, counting) needed to deliver, and pack and mark the goods for the transport, unless the trade customarily ships them unpacked or the parties agreed specific packing. | No obligation to the seller. |
| A9/B9 Allocation of costs | Pay all costs until delivery, the freight and other costs of the carriage contract including loading, any unloading and transit costs that the carriage contract puts on the seller, the transport document and export clearance. | Pay all costs from delivery except those on the seller under the carriage contract, unloading and transit costs unless the seller's carriage contract covers them, and import duties and taxes. |
| A10/B10 Notices | Notify the buyer that the goods have been delivered, and give any notice the buyer needs to receive them. | If entitled to decide the dispatch time or the point of receipt at destination, give the seller sufficient notice. |
A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.
All 11 Incoterms 2020 rules
Guides on this topic
Common questions
What is the full form and meaning of CPT?
CPT stands for Carriage Paid To, one of the 11 Incoterms® 2020 rules. Transport: Any mode. Delivery and risk pass to the buyer: Handed to the first carrier in the country of shipment. Main freight paid by: Seller. Insurance: Not required. Export clearance: Seller. Import clearance and duties: Buyer.
Where does risk pass under CPT?
When the seller hands the goods to the first carrier in the country of shipment, not at the destination named in the rule.
Does CPT include insurance?
No. Neither party must insure under CPT. Because the buyer carries the risk in transit, the buyer usually arranges cover.
Who pays THC (terminal handling charges) under CPT?
The seller pays the carriage to the destination, but under Incoterms 2020 articles A9/B9 it pays unloading costs at destination only if they were for its account under its contract of carriage. Carriers and terminals often bill destination THC to the consignee, so state in the quote and contract who pays origin and destination THC.
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