CPT – Carriage paid to ... (Place of Destination)

Characteristics

In CPT the seller clears goods for exports and delivers to the nominated carrier at the agreed place of shipment at origin. In this point, the risk is transferred to the seller. The seller is responsible for contracting and paying the main carriage until the agreed named place of destination. The contract of carriage must specify origin and destination. This term can be used for any mode of transportation.

This term is popular in Ro-Ro and airfreight shipments. If there is more than one mode of transportation, the risk is transferred when goods have been delivered to the first carrier.



Incoterms 2010 CPT

Explained

Similar to CIP, but without insurance paid by seller.

Seller pays transportation to destination. The buyer obtains insurance for his own risk. Delivery ocurre at origin with first carrier, this means that delivery happens at origin and seller pays for freight until final destination. Seller arranges export clearance and can be used for any mode of transportation.

In case of claims, buyer can claim directly with insurance company. For CIP and CPT, place at destination can be multiple locations. Freight doesn’t have the same cost when transported to port of destination or inland destination warehouse, additional inland and terminal handling charges will apply. Buyer is responsible for customs clearance. In practice, delays caused at origin which incurs in additional expenses are usually a point of discussion between buyer and seller.

Incoterms 2010 CPT - delivery

Examples

Monitors from China to Indonesia:

 CPT Customer warehouse Jakarta, Indonesia

Seller, a reputable electronics company, sells Monitors to Jakarta via ocean. Seller pays for freight from origin to a warehouse located in Jakarta and unloads goods. Buyer is responsible for insure goods from origin until Jakarta warehouse. In this scenario, even it would be more convenient and easy for buyer to arrange transportation from port of destination to Jakarta warehouse, sellers is in charge of this segment of transportation and expenses via a destination forwarder or a contract of carriage which include all expenses. Additionally, buyer pays for customs clearance plus duties and taxes.

Seller and Buyer obligations

THE SELLER'S OBLIGATIONS
THE BUYER'S OBLIGATIONS
1. Provision of goods in conformity with the contract The seller must deliver the goods, provide commercial invoice or an equivalent electronic document, provide evidence of conformity or proof of delivery 1. Payment of the price The buyer must pay the price of goods as agreed in the contract of sale
2. Licences, authorisations and formalities The seller must provide export licenses or local authorisations for exporting goods 2. Licences, authorisations and formalities The buyer must get any export license and import permit for the export of goods
3. Contracts of carriage and insurance Contract of carriage at sellers expense in the usual route. No obligation to provide insurance 3. Contracts of carriage and insurance Contract of carriage: no obligation Contract of insurance: no obligation
4. Delivery The seller must deliver the goods to the first carrier as agreed on named place and time 4. Taking delivery Take delivery of the goods at the agreed place
5. Transfer of risks The seller is responsible for the goods loss and damaged until the goods have been delivered as agreed 5. Transfer of risks Assume al risk of loss and damage at the time the goods have been delivered to the first carrier
6. Division of costs The seller pays all cost until goods have been delivered to the first carrier, including loading at place of origin and unloading at place of destination under the agreed contract. All export cost, duties and taxes until the agreed point of destination 6. Division of costs The buyer pays all cost until goods have been delivered at point of destination. Cost and charges while cargo is in transit not included in the contract of carriage. Duties and taxes at destination as well as import clearance
7. Notice to the buyer The seller must provide notice of the goods delivered 7. Notice to the seller The buyer must provide sufficient notice for the goods to be delivered as per agreement
8. Proof of delivery, transport document or equivalent electronic message The seller must provide the usual transport document or electronic message equivalent 8. Proof of delivery, transport document or equivalent electronic message Accept the transport document as per contract
9. Checking The seller must bear the cost of checking, quality control, measuring, weighing, counting, packing of goods and marking. If special package is required, the buyer must inform and the seller and agreed on extra expenses 9. Inspection of goods The buyer must bear the cost of pre-shipment and exports inspection except when is mandatory by the government
10. Other obligations The seller must cooperate with all documentation for export and insurance 10. Other obligations Reimburse the seller for cost related to obtain documentation that buyer requires for customs clearance at destination.