CPT (Carriage Paid To) is an Incoterms® 2020 rule that requires the seller to contract and pay for the carriage of the goods to the agreed place of destination. The seller delivers the goods by handing them over to the carrier it has contracted, not at destination.
The fundamental characteristic of CPT is the separation between the point of risk transfer and the point to which the seller pays for carriage. Risk transfers to the buyer upon handover to the first carrier (at the place of delivery), while the seller bears the cost of carriage to the agreed destination.
CPT is suitable for any mode of transport (sea, air, road, rail, multimodal). It is particularly well suited to multimodal transport and containerised shipments.
The seller is responsible for export clearance but has no obligation regarding import clearance or payment of import duties. The seller has no obligation to arrange insurance (unlike CIP).
Under CPT, two places are critical: the place of delivery (risk transfer) and the place of destination (to which the seller pays for carriage). The parties should identify both as precisely as possible to avoid any ambiguity.
When does risk transfer from seller to buyer under CPT?
Under CPT Incoterms 2020, risk transfers to the buyer when the goods are handed over to the first carrier contracted by the seller. This is the place of delivery, which is typically well before the goods reach the agreed destination. If multiple carriers are involved in multimodal transport and no specific delivery point is agreed, risk transfers at the point of handover to the very first carrier.
Why are risk and cost transfer points different under CPT?
Under CPT, risk transfers at the place of delivery (handover to the first carrier) while the seller pays for carriage to the agreed destination. This separation means the goods travel at the buyer's risk but at the seller's expense between delivery and destination. This is the most important and most misunderstood feature of CPT. The buyer should therefore take out transport insurance covering the journey from the place of delivery to the destination.
Who pays for transport under CPT but who bears the risk?
The seller pays for the carriage from the place of delivery to the agreed destination. However, the buyer bears the risk of loss or damage from the moment the goods are handed to the first carrier. This means that if goods are damaged during the main carriage, it is the buyer's loss even though the seller paid for the transport. The buyer should always arrange transport insurance to cover this gap.
What is the difference between CPT and CIP Incoterms 2020?
The only significant difference is insurance. Under CIP, the seller must arrange transport insurance covering the buyer's risks at a minimum of Institute Cargo Clauses A (all risks) since Incoterms 2020. Under CPT, the seller has no insurance obligation whatsoever. In all other respects - delivery, risk transfer, carriage, export clearance - the two rules are identical. Use CIP when the buyer wants the seller to arrange insurance.
Does the seller need to insure goods under CPT?
No, the seller has no contractual obligation to arrange insurance under CPT. However, since risk transfers to the buyer upon handover to the first carrier, the buyer is exposed to potential losses during the entire main carriage without any contractual insurance cover. The buyer should systematically arrange transport insurance. If the parties want the seller to handle insurance, they should use CIP instead of CPT.
Who pays unloading costs at destination under CPT?
If unloading costs at destination are included in the seller's contract of carriage, the seller bears them and may not recover them separately from the buyer unless otherwise agreed. If these costs are not included in the contract of carriage, they are for the buyer's account. The allocation of unloading costs should be clarified in the sales contract to avoid disputes upon arrival.
Can CPT be used for maritime transport?
Yes, CPT can be used for any mode of transport including maritime, air, road, rail, and multimodal. However, for maritime-only transport, the parties may prefer CFR (Cost and Freight) which is specifically designed for sea and inland waterway transport. CPT is the "any mode" equivalent of CFR and is particularly well suited to containerised and multimodal shipments.
How does CPT affect customs valuation for import?
The CPT price includes carriage to the agreed destination and export costs but excludes insurance. For customs valuation purposes (CIF basis in the EU), if the CPT destination is within the EU, the freight element is already included in the price; however, an insurance element must be added to reach CIF value. If the destination is beyond the EU border, adjustments may be necessary depending on the specific situation.
What is the difference between CPT and CFR?
CPT and CFR share the same cost/risk separation concept: the seller pays carriage to destination while risk transfers at delivery to the carrier. The key difference is the mode of transport. CFR is restricted to sea and inland waterway transport, while CPT can be used for any mode of transport including multimodal. For containerised goods that are handed to the carrier at an inland terminal before loading onto a vessel, CPT is more appropriate than CFR.
When should CPT be used instead of CIP?
CPT should be used instead of CIP when the buyer prefers to arrange its own insurance policy, potentially obtaining better coverage or rates. CPT is also appropriate when the buyer already has a blanket cargo insurance policy covering all its imports. If the buyer does not have existing insurance coverage and would benefit from the seller arranging it, CIP is the better choice.
Who handles export clearance under CPT?
The seller must carry out and pay for all export clearance formalities required by the country of export, including export licences, security clearances, and pre-shipment inspections. The seller has no obligation regarding import clearance - that is the buyer's responsibility. The seller must assist the buyer with import-related documents if requested, but at the buyer's risk and expense.
What are the seller's full obligations under CPT?
The seller must deliver the goods to the first carrier, arrange and pay for carriage to the agreed destination, handle export clearance, bear all risks until handover to the carrier, and provide the buyer with the usual transport document. The seller must also notify the buyer of delivery and provide information needed by the buyer to arrange insurance. The seller has no obligation to arrange insurance or handle import clearance.
Can CPT be used for multimodal transport?
Yes, CPT is particularly well suited to multimodal transport involving multiple modes (e.g. road + sea + road, or rail + sea). This is one of its major advantages over maritime-only Incoterms like CFR and CIF. When multiple carriers are involved, risk transfers to the buyer upon handover to the first carrier unless the parties agree on a different delivery point.
How should the CPT destination be specified in a contract?
The correct wording is "CPT [agreed place of destination] Incoterms 2020", for example: "CPT Shanghai, China - Incoterms 2020" or "CPT Warehouse X, 200 Port Road, Shanghai - Incoterms 2020". It is strongly recommended to also specify the place of delivery (risk transfer point) in the contract, especially for multimodal transport, to avoid ambiguity about where risk transfers to the buyer.
What happens if goods are damaged after handover to the first carrier?
The buyer bears the loss, since risk transferred to the buyer upon handover to the first carrier. Even though the seller contracted and paid for the carriage, the seller is not liable for damage occurring after delivery to the carrier. The buyer must claim against its own insurer (if any) or against the carrier under the contract of carriage. This is why transport insurance is strongly recommended for the buyer under CPT.
Is CPT suitable for containerized shipments?
Yes, CPT is particularly suitable for containerised shipments, especially those involving multimodal transport. When goods are packed in containers and handed to the first carrier at an inland depot or container terminal (rather than loaded onboard a vessel), CPT is more appropriate than the maritime-only CFR. Risk transfers when the container is handed to the first carrier, providing clarity for containerised logistics.
Common mistakes
1Confusing the place of delivery (risk transfer) with the place of destination (end of seller's cost obligations), believing the seller is responsible all the way to destination.
2Failing to take out transport insurance when the buyer bears all risks from handover to the first carrier.
3Not specifying both places (delivery and destination) precisely, leaving the seller free to choose the points that suit it best.
Seller vs buyer obligations
Obligation
Seller
Buyer
Export formalities
Loading
Main transport
Transport insurance
Unloading
Import formalities
Risk transfer diagram
ICC Explanatory notes
Delivery, risks, and destination
Under CPT, "Carriage Paid To" means that the seller delivers the goods - and transfers risk - to the buyer by handing them over to the carrier contracted by the seller, or by procuring goods so delivered.
Once the goods have been delivered in this manner, the seller does not guarantee that the goods will arrive at the destination in good condition, in the stated quantity, or even that they will arrive at all. Risk transfers from the seller to the buyer upon handover to the carrier. However, the seller must contract for carriage from the point of delivery to the agreed destination.
Example: goods are handed over to a carrier in Lyon for transport to Shanghai. Delivery (risk transfer) takes place in Lyon; however, the seller must conclude a contract of carriage to Shanghai.
Critical point: under CPT, there are two important places:
The place of delivery: where risk transfers to the buyer (handover to the carrier).
The place of destination: to which the seller pays for carriage.
Applicable mode of transport
CPT can be used regardless of the mode of transport selected, including multimodal transport. This is one of its major advantages over maritime-only Incoterms (CFR, CIF).
CPT is the "any mode" equivalent of CFR (Cost and Freight), which is restricted to sea transport.
Specifying the place of delivery and destination
The parties are strongly encouraged to identify both places (delivery and destination) as precisely as possible in the contract of sale.
Place of delivery: if multiple carriers are involved (multimodal transport) and the parties do not agree on a specific place of delivery, the default position is that risk transfers when the goods are handed over to the first carrier, at a point entirely chosen by the seller. If the parties wish for risk to transfer later (e.g. at the port or airport), they must specify this in their contract.
Place of destination: this is the point to which the seller must contract for carriage and to which the carriage costs are at the seller's expense. The parties should identify this point as precisely as possible.
Unloading costs at destination: if the seller incurs unloading costs at destination under its contract of carriage, the seller is not entitled to recover those costs separately from the buyer, unless otherwise agreed.
Critical points
Separation of risks and costs
Risk transfers at the carrier but the seller pays carriage to destination - a frequent source of confusion.
The most important and most confusing feature of CPT is the separation between the point of risk transfer and the point of cost transfer:
Risk: transfers to the buyer upon handover to the first carrier (place of delivery).
Costs: borne by the seller up to the agreed destination.
This means that between the place of delivery and the destination, the goods travel at the buyer's risk but at the seller's expense. If the goods are damaged during the main carriage, it is the buyer who bears the loss - even though the seller paid for the transport.
Recommendation: the buyer should take out transport insurance covering the journey from the place of delivery to the destination. Since the seller has no insurance obligation under CPT, it is up to the buyer to protect itself. If the buyer wants the seller to arrange insurance, use CIP instead.
Carrier selection by the seller
The seller selects the carrier - the buyer has no control over transport.
Under CPT, it is the seller who selects and contracts with the carrier. The buyer has no control over:
The choice of carrier
The route taken
The conditions of carriage
The seller must conclude the contract of carriage on usual terms, at its own expense, by the usual route and in a customary manner for the type of goods sold.
Key consideration: if the parties do not agree on a specific point of delivery or destination, the seller may choose those that best suit its purpose. The buyer has every interest in negotiating these points in the contract.
Recommendation: specify in the contract the carrier or carrier selection criteria, and precisely define the points of delivery and destination.
No insurance obligation
Neither the seller nor the buyer is obliged to arrange insurance - a risk for the buyer.
Under CPT, the seller has no obligation to the buyer to make a contract of insurance. The buyer has no obligation to the seller either.
Since risk transfers to the buyer upon handover to the carrier (often well before arrival at destination), the buyer bears the risk of loss or damage throughout the main carriage, without any contractual insurance cover.
Consequence: if the goods are lost or damaged between the place of delivery and the destination, the buyer bears the loss, unless they have taken out their own insurance.
Recommendation: the buyer should systematically take out transport insurance covering at least the journey from the place of delivery. If insurance by the seller is desired, use CIP instead of CPT.
Detailed seller obligations (A1-A10)
Article A1General obligations
The seller must provide the goods and the commercial invoice in conformity with the contract of sale, together with any other evidence of conformity that may be required by the contract.
Any document to be provided by the seller may be in paper or electronic form as agreed or, where there is no agreement, as is customary.
Article A2Delivery
The seller must deliver the goods by handing them over to the carrier contracted in accordance with A4, or by procuring goods so delivered. In either case, the seller must deliver the goods on the agreed date or within the agreed period.
Article A3Transfer of risks
The seller bears all risks of loss of or damage to the goods until they have been delivered in accordance with A2, with the exception of loss or damage in the circumstances described in B3.
Article A4Carriage
The seller must contract or procure a contract of carriage for the goods from the agreed point of delivery, if any, at the place of delivery to the agreed place of destination or, if agreed, any point at that place.
The contract of carriage must be made on usual terms at the seller's expense and provide for carriage by a usual route and in a customary manner for the type of goods sold. If no specific point is agreed or determined by practice, the seller may select the point of delivery and the point at the place of destination that best suit its purpose.
The seller must comply with any transport-related security requirements applicable to the destination.
Article A5Insurance
The seller has no obligation to the buyer to make a contract of insurance. However, the seller must provide the buyer, at the buyer's request, risk, and expense, with information in the seller's possession that the buyer needs for obtaining insurance.
Article A6Delivery / transport document
If customary or at the buyer's request, the seller must provide the buyer, at the seller's own expense, with the usual transport document(s) for the transport contracted in accordance with A4.
This transport document must cover the contract goods and be dated within the agreed period for shipment. If agreed or customary, the document must also enable the buyer to claim the goods from the carrier at the agreed place of destination and to sell the goods in transit by transferring the document to a subsequent buyer or by notification to the carrier.
When such a transport document is issued in negotiable form and in several originals, a full set of originals must be presented to the buyer.
Article A7Export / import clearance
a) Export clearance: where applicable, the seller must carry out and pay for all export clearance formalities required by the country of export, such as:
export licence;
security clearance for export;
pre-shipment inspection;
any other official authorisation.
b) Import clearance assistance: where applicable, the seller must assist the buyer, at the buyer's request, risk, and expense, in obtaining any document and/or information relating to transit/import clearance formalities, including security requirements and pre-shipment inspection, needed in any country of transit or in the country of import.
Article A8Checking / packaging / marking
The seller must pay the costs of those checking operations (such as checking quality, measuring, weighing, counting) that are necessary for the purpose of delivering the goods in accordance with A2.
The seller must, at its own expense, package the goods, unless it is usual for the particular trade to transport the type of goods sold unpackaged. The seller must package and mark the goods in the manner appropriate for their transport, unless the parties have agreed on specific packaging or marking requirements.
Article A9Allocation of costs
The seller must pay:
a) All costs relating to the goods until they have been delivered in accordance with A2, other than those payable by the buyer (B9).
b) Carriage and all other costs resulting from A4, including loading charges and any transport-related security costs.
c) Unloading costs at the agreed place of destination, but only if such costs are for the seller's account under the contract of carriage.
d) Transit costs that are for the seller's account under the contract of carriage.
e) The cost of providing the usual proof to the buyer (A6) that the goods have been delivered.
f) Where applicable, duties, taxes, and any other costs related to export clearance (A7a).
g) Reimbursement to the buyer of all costs and charges incurred in providing assistance in obtaining documents and information in accordance with B7(a).
Article A10Notices
The seller must notify the buyer that the goods have been delivered in accordance with A2.
The seller must give the buyer any notice needed to allow the buyer to receive the goods.
Detailed buyer obligations (B1-B10)
Article B1General obligations
The buyer must pay the price of the goods as provided in the contract of sale.
Any document to be provided by the buyer may be in paper or electronic form as agreed or, where there is no agreement, as is customary.
Article B2Taking delivery
The buyer must take delivery of the goods when they have been delivered in accordance with A2 and receive them from the carrier at the agreed place of destination or, if agreed, at the point within that place.
Article B3Transfer of risks
The buyer bears all risks of loss of or damage to the goods from the time they have been delivered in accordance with A2.
If the buyer fails to give notice in accordance with B10, the buyer bears all risks of loss of or damage to the goods from the agreed date or the expiry date of the agreed period for delivery, provided that the goods have been clearly identified as the contract goods.
Article B4Carriage
The buyer has no obligation to the seller to make a contract of carriage.
Article B5Insurance
The buyer has no obligation to the seller to make a contract of insurance.
Article B6Delivery / transport document
The buyer must accept the transport document provided in accordance with A6 if it is in conformity with the contract.
Article B7Export / import clearance
a) Export clearance assistance: where applicable, the buyer must assist the seller, at the seller's request, risk, and expense, in obtaining any document and/or information relating to export clearance formalities, including security requirements and pre-shipment inspection, needed in the country of export.
b) Import clearance: where applicable, the buyer must carry out and pay for all formalities required by any country of transit and the country of import, such as:
import licence and any licence required for transit;
security clearance for import and any transit;
pre-shipment inspection;
any other official authorisation.
Article B8Checking / packaging / marking
The buyer has no obligation to the seller.
Article B9Allocation of costs
The buyer must pay:
a) All costs relating to the goods from the time they have been delivered in accordance with A2, other than those payable by the seller (A9).
b) Transit costs, unless such costs were for the seller's account under the contract of carriage.
c) Unloading costs, unless such costs were for the seller's account under the contract of carriage.
d) Reimbursement to the seller of all costs and charges incurred in providing assistance in obtaining documents and information in accordance with A5 and A7(b).
e) Where applicable, duties, taxes, and any other costs related to transit or import clearance (B7b).
f) Any additional costs incurred if the buyer fails to give notice in accordance with B10, from the agreed date or the expiry date of the agreed period for shipment, provided that the goods have been clearly identified as the contract goods.
Article B10Notices
The buyer must, whenever it is agreed that the buyer is entitled to determine the time of shipment and/or the point of receiving the goods at the agreed place of destination, give the seller sufficient notice.
CPT vs CIP comparison
Critère
CPT
CIP
Insurance
No obligation
Seller arranges (Institute Cargo Clauses A - all risks)
Carriage
Seller arranges and pays
Seller arranges and pays
Transfer of risks
At the first carrier
At the first carrier
Cost to the seller
Carriage + export
Carriage + export + insurance
Buyer protection
Must arrange own insurance
Covered by seller's insurance
Critère
CPT
FCA
Main carriage
Seller arranges and pays
Buyer arranges and pays
Transfer of risks
At the first carrier
To the carrier at the agreed place
Contract of carriage
By the seller
By the buyer
Place of destination
Seller pays carriage to destination
Buyer pays from delivery onward
Logistics control
Seller controls transport
Buyer controls transport
Impact on customs value
Incoterm CPT belongs to group CPT. This group determines which adjustments (AK/BA) are applied to the invoiced price to calculate customs value.
Multimodal transport: ideal when the seller arranges the main carriage (container, air freight, etc.).
When the seller has better carriage terms: the seller may obtain more competitive freight rates thanks to its shipping volume.
When the buyer wants simplicity: the buyer does not have to arrange main carriage - they simply receive the goods at destination.
Alternative to CFR for non-maritime transport: CPT is the "any mode" equivalent of CFR.
When to avoid CPT
If the buyer wants insurance from the seller: use CIP.
If the buyer wants to control transport: use FCA.
For sea-only transport: consider CFR for greater clarity.
If the buyer is unaware of the risk/cost separation: risk of misunderstanding regarding coverage during carriage.
Recommended contractual clauses
Two distinct places: clearly specify the place of delivery (risk transfer) and the place of destination (end of seller's cost obligations).
Insurance: the buyer should systematically take out transport insurance covering the journey from the place of delivery to the destination.
Carrier: define the carrier selection criteria (quality, lead times, route).
Unloading: clarify whether unloading costs at destination are included in the seller's contract of carriage.
Precise destination point: identify the exact point at the place of destination to avoid any ambiguity about the scope of the seller's cost obligations.
Analysis by profile
Advantages
Obligations limitées. L'acheteur n'est pas en charge des sujets de logistique liés au transport.
Disadvantages
L'acheteur ne choisit pas les prestataires de transport mais supporte les risques une fois les marchandises placées sur le premier moyen de transport.
Recommendations
Attention, il convient de distinguer précisément le lieu de livraison (= transfert des risques) du lieu de destination (= répartition des coûts).
Si l'acheteur est le plus à même de réaliser le transport international, il conviendra de choisir un autre incoterm.
Assurance transport principal conseillée.
Important : Transport insurance is recommended for this Incoterm.
Comparative analysis (radar)
CPT
Compare with
Common mistakes
1
Confusing the place of delivery (risk transfer) with the place of destination (end of seller's cost obligations), believing the seller is responsible all the way to destination.
2
Failing to take out transport insurance when the buyer bears all risks from handover to the first carrier.
3
Not specifying both places (delivery and destination) precisely, leaving the seller free to choose the points that suit it best.
4
Confusing CPT with CIP, forgetting that CPT includes no insurance obligation for the seller.
5
Neglecting to clarify the allocation of unloading costs at destination, a frequent source of disputes.
CPT 2020: Seller Pays Freight, Buyer Bears Risk - The Trade Hub