Incoterm CPT (Carriage Paid To): your supplier pays for transport, but the risk is yours
Incoterm CPT (Carriage Paid To) is a widely used multimodal rule that offers a balance of responsibilities between the seller and the buyer. Under CPT, the seller undertakes to pay for the main carriage to the agreed destination, but the risk transfers to the buyer at the point of origin.
It is an excellent option if you want your supplier to handle the initial logistics and freight costs, but you prefer to manage the insurance of your goods, ensuring the most appropriate coverage in each situation.
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How does CPT work? The transfer of risk at origin
Point of Delivery (Transfer of Risk)
The seller fulfils their obligation to deliver at the moment they place the goods at the disposal of the first carrier contracted. At that moment, the risk of loss or damage passes from the seller to the buyer.
Point of Destination (Distribution of Costs)
The seller pays the cost of transport to the agreed place of destination (e.g., your warehouse, a port, or an airport).
Practical Example
Point 1 (Origin - Transfer of Risk)
The supplier loads the furniture onto the transport company's truck at their warehouse in China. The moment the truck leaves the factory, the risk of the cargo passes to you, the buyer.
Point 2 (Destination - Distribution of Costs)
The supplier pays all costs for the goods to arrive at the port of Barcelona.
Your responsibility
Responsibilities under Incoterm CPT
Seller's responsibility
- Package the goods and make them ready for transport.
- Manage and pay for inland transport at origin.
- Manage and pay for export customs clearance.
- Contract and pay for main carriage (e.g., sea or air freight) to the agreed place of destination.
Your responsibility (buyer)
- Assume the risk of the goods from the moment they are delivered to the first carrier at origin.
- Contract and pay for goods insurance.
- Manage and pay for import customs clearance, taxes, and duties.
- Assume unloading costs at destination (unless otherwise agreed).
- Contract and pay for transport from the agreed place of destination to your final warehouse.
CPT vs. FCA: What is the key difference?
CPT vs. CIP: The key lies in insurance
Do you need help managing your shipment under Incoterm CPT?
The correct application of Incoterms is vital to avoid surprises in your supply chain, and at Envio x Envio we know this. That is why, if you have doubts about the costs or management of your cargo, our professional team is here to help you plan your logistics efficiently and securely, clarifying any doubts so that your logistical operations are fully successful.
Frequently Asked Questions
01.Who pays for the insurance?
Under CPT there is no compulsory insurance: the seller pays for carriage but is not obliged to insure the goods. Since the risk is yours from the first carrier, you arrange the cover. If you want the insurance to be the seller's obligation, the Incoterm is CIP.
02.Where is it delivered?
At origin, the moment the seller hands the goods to the first carrier it has contracted. Risk passes to the buyer there, even though the seller pays for carriage to the destination: that is the "two points" of CPT.
03.Is it multimodal?
Yes. CPT works for any mode of transport and for combinations of several, because delivery is defined by handing the goods to the first carrier, not by the type of vehicle.
Other Incoterms
EXWEx Works
The least responsibility for the seller. The goods are delivered at their warehouse or factory. The buyer assumes all costs and risks from that point.
FCAFree Carrier
The seller delivers the goods to the carrier designated by the buyer.
CIPCarriage and Insurance Paid To
The seller pays for transport and insurance to the agreed destination.
DPUDelivered at Place Unloaded
The seller assumes all costs and risks until the goods are delivered and unloaded at the agreed destination (e.g., a terminal or warehouse).
DAPDelivered At Place
The seller delivers when the goods are made available at the agreed place.
FASFree Alongside Ship
The seller delivers the goods to the carrier designated by the buyer.
CIFCost, Insurance and Freight
The seller pays the cost, insurance and freight to the destination port.
