Incoterms® 2020 · Any mode of transport
CPT (Carriage Paid To) under Incoterms® 2020
Under CPT the seller hands the goods to a carrier it has contracted and pays carriage to the named place of destination. Risk passes to the buyer as soon as the goods are handed to the first carrier. CPT works for any mode of transport and is the container-friendly counterpart of CFR.
- Risk transfer
- Risk passes to the buyer when the seller hands the goods to the first carrier at the place of delivery in the country of export, unless the parties agree a specific later point.
- Cost transfer
- The seller pays delivery costs and carriage to the named destination; the buyer pays costs after delivery that are not part of the contract of carriage.
- Mode of transport
- Any mode of transport
- Insurance
- Not required, agreed between the parties
Who does what along the delivery chain
- 1Loading at seller's premisesSeller
- 2Export clearanceSeller
- 3Transport to port/terminal of departureSeller
- 4Loading onto main carriageSeller
- 5Main carriageSeller
- 6Cargo insuranceNot required / negotiable
- 7Unloading at destinationBuyer
- 8Import clearanceBuyer
- 9Import duties & taxesBuyer
- 10Delivery to final destinationBuyer
Seller's obligations
- Provide the goods, a commercial invoice and suitable packaging.
- Carry out and pay for export clearance.
- Contract and pay for carriage from the place of delivery to the named destination.
- Hand the goods to the carrier within the agreed period.
- Provide the usual transport document to the buyer.
- Notify the buyer that the goods have been delivered.
Buyer's obligations
- Pay the price.
- Bear risk from the moment the goods are handed to the first carrier.
- Take delivery at destination and pay unloading, unless included in the contract of carriage.
- Carry out and pay for import clearance and import duties.
- Decide whether to insure the goods.
- Notify the time and exact point of receipt if it is entitled to determine them.
Use it when
- Exporting containers when the seller wants to arrange freight but pass risk early.
- Air freight or courier, where the seller has good rates.
- Cross-border road, rail or multimodal transport.
Avoid it when
- The buyer needs insurance arranged by the seller, where CIP fits better.
- The buyer wants to control the main carrier.
- Bulk cargo loaded directly onto the vessel, where CFR fits better.
Common mistakes
- Believing risk passes at the destination.
- Not naming the delivery point in the country of export when several carriers are involved.
- The buyer fails to insure the transit.
- Not agreeing unloading and destination charges.
Practice in Vietnam
CPT suits many Vietnamese exporters currently selling CFR for containers, for example switching from "CFR Los Angeles" to "CPT Los Angeles". Risk then passes when the container is handed to the carrier at Cat Lai or an ICD, which is when the seller actually loses control. CPT is also common for air exports from Tan Son Nhat and Noi Bai and for road shipments to Cambodia, Laos and China. Where the journey has several legs, for instance trucking from Bac Ninh to Hai Phong port then ocean, name the delivery point so it is clear on which leg risk passes.
Worked example
An electronics manufacturer in Bac Ninh sells components to a Japanese customer on "CPT Narita Airport, Japan, Incoterms® 2020". The seller clears export customs, hands the goods to the airline at the Noi Bai cargo terminal and pays air freight to Narita. Risk passes to the buyer as soon as the goods are delivered at Noi Bai, so the buyer insures the flight itself. The buyer clears import customs and pays charges at Narita.
Frequently asked questions
How does CPT differ from CFR?
CFR is for sea transport only, with risk passing when the goods are on board. CPT works for any mode, with risk passing when the goods are handed to the first carrier.
Under CPT, where does risk pass when there are several carriers?
Unless otherwise agreed, risk passes when the goods are handed to the first carrier, even if that is a domestic trucker. The parties can agree a later delivery point, for example at the seaport.
Does the CPT seller have to insure?
No. If you want the seller to insure, use CIP.
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This content is for general guidance and does not replace legal or banking advice for a specific transaction.
Incoterms® 2020 responsibility matrix
| Rule | Loading at seller's premises | Export clearance | Transport to port/terminal of departure | Loading onto main carriage | Main carriage | Cargo insurance | Unloading at destination | Import clearance | Import duties & taxes | Delivery to final destination |
|---|---|---|---|---|---|---|---|---|---|---|
| EXW | B | B | B | B | B | – | B | B | B | B |
| FCA | S | S | S | B | B | – | B | B | B | B |
| FAS | S | S | S | B | B | – | B | B | B | B |
| FOB | S | S | S | S | B | – | B | B | B | B |
| CFR | S | S | S | S | S | – | B | B | B | B |
| CIF | S | S | S | S | S | S* | B | B | B | B |
| CPT | S | S | S | S | S | – | B | B | B | B |
| CIP | S | S | S | S | S | S* | B | B | B | B |
| DAP | S | S | S | S | S | – | B | B | B | S |
| DPU | S | S | S | S | S | – | S | B | B | S |
| DDP | S | S | S | S | S | – | B | S | S | S |
- S Seller
- B Buyer
- S* Seller obligation (insurance)
- – Not required / negotiable
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