CPT – Carriage paid to (Place of Destination) - Incoterms 2020

Explained

In CPT the seller clears the goods for export and delivers to the carrier nominated by the seller at the agreed place of shipment at the origin. At this point, the risk is transferred to the buyer. 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.

It is advised to mention the destination place as clearly as possible in the contract of sale. Unless otherwise agreed, unloading at the named place of destination will be under sellers account.

Doing Business

Similar to CIP, but without insurance paid by the seller.
Seller pays transportation to the destination. The buyer obtains insurance for his own risk. Delivery happens at the origin with the first carrier, this means that delivery happens at origin and the seller pays for freight until the final destination. Seller arranges export clearance and can be used for any mode of transportation.
In the case of claims, the buyer can claim directly with the insurance company.Freight doesn’t have the same cost when transported to the port of destination or inland destination warehouse, additional inland and terminal handling charges will apply. The 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.

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.

Examples

Computer monitors from China to Indonesia:

CPT Customer warehouse Jakarta, Indonesia - Incoterms® 2020

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. The buyer is responsible for insuring goods from origin until Jakarta warehouse. In this scenario, even if it would be more convenient and easy for the buyer to arrange transportation from the port of destination to Jakarta warehouse, sellers are in charge of this segment of transportation and expenses via a destination forwarder or a contract of carriage which includes all expenses. Additionally, the buyer pays for customs clearance plus duties and taxes.

Seller and Buyer obligations

THE SELLER’S OBLIGATIONS	THE BUYER’S OBLIGATIONS
1. General The seller must deliver the goods, commercial invoice, and any evidence of conformity.	1. General The buyer must pay the price of goods as agreed.
2. Delivery Deliver the goods to the carrier on the agreed date or period.	2. Taking Delivery The buyer takes the goods from the carrier at the place of destination.
3. Risks All risk of loss/damage until goods have been delivered.	3. Risks All risk of loss/damage from the time or end of the period agreed for delivery. If the buyer fails to give notice of the port of destination, the risk is under the buyer.
4. Carriage Contract carriage of goods until the place of destination.	4. Carriage No obligation to contract a carrier.
5. Insurance No obligation insure the goods.	5. Insurance No obligation to insure the goods.
6. Delivery/transport document Provide the usual transport document and dated within the agreed shipment period. Full set of originals if the document is negotiable.	6. Delivery/transport document Accepts the proof of delivery
7. Export/Import clearance All export clearance expenses (license, security, inspection, etc). Assist with import clearance	7. Export/Import clearance Assist with export clearance. Pay for import clearance and formalities (licenses, security, official documentation).
8. Checking The seller must check, count, weight, mark, and package goods	8. Checking No obligation.
9. Allocation of cost Pay all the cost until delivery, freight cost, loading cost, and unloading. Transit costs. Cost of proof of delivery. Duties and taxes for export. All costs related to providing assistance in obtaining documents to the buyer	9. Allocation of cost Pay from the time goods delivered. Unloading cost not related to the contract of carriage. All costs for assistance on getting documents and information. Pay duties and taxes for import or transit. Any additional cost if the seller is not notified about shipment date or period.
10. Notices Give notice that goods have been delivered.	10. Notices Time or period for dispatching the goods and name the point of receiving the goods.

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