Where delivery happens
When the goods are handed to the first carrier at the place of shipment.
The seller
- Export clearance
- Contracts and pays carriage to the named destination
The buyer
- Risk from handover to the first carrier
- Insurance (if wanted)
- Import clearance, duty and GST/VAT
- Unloading costs at destination unless the freight contract includes them
When risk passes
Passes at the first carrier in the seller's country, even though the seller has paid freight further on.
When to use CPT
The seller can get better freight rates but the buyer accepts the transit risk.
Watch out
There are two critical points: where risk passes (origin) and where cost stops (destination). Buyers often assume they are covered in transit when they are not; arrange insurance.
Example
CPT Brisbane: the seller pays air freight to Brisbane, but if the cargo is damaged in flight it is the buyer's loss to claim.
How it appears on the invoice
Write the three-letter code, the named place and the rules version, for example CPT Brisbane Airport (Incoterms® 2020). The full name is not needed on the document. In Vendara Trade Documents you pick CPT – Carriage Paid To from the list and the invoice prints just CPT with your named place.
Frequently asked questions
What does CPT mean?
CPT stands for Carriage Paid To (Incoterms® 2020). The seller pays the freight to the named destination, but the risk passes to the buyer as soon as the goods are handed to the first carrier.
Where does risk pass under CPT?
Passes at the first carrier in the seller's country, even though the seller has paid freight further on.
Who pays import duty and GST under CPT?
The buyer pays import clearance, duty and import GST or VAT.
When should I use CPT?
The seller can get better freight rates but the buyer accepts the transit risk.
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