What is CPT?
CPT, short for Carriage Paid To, is one of the eleven Incoterms® 2020 rules. The seller clears the goods for export, books and pays the main transport to a destination named in the contract, and hands the goods to the first carrier. Risk passes to the buyer at that handover, even though the seller has paid for the rest of the journey.
CPT works for every transport mode. It is the multimodal counterpart of CFR, which is limited to sea transport.
Core principle: Costs and risk split at different points. The seller pays to the destination, but the buyer carries the risk from the first carrier.
Who does what under CPT
| Task | Seller | Buyer |
|---|---|---|
| Export clearance | ✓ | |
| Main carriage to the named destination | ✓ | |
| Insurance | Not required | Recommended, as the buyer carries the risk |
| Import clearance, duty and import VAT | ✓ | |
| Risk passes | When the goods are handed to the first carrier | |
The two critical points
Place of delivery
Where the goods are handed to the first carrier, for example the seller’s warehouse or an airport. Risk passes here.
Watch out for: If the contract doesn’t name this place, risk passes at the first handover the seller chooses, which may be earlier than you expect.
Place of destination
Where the paid carriage ends, for example “CPT Tallinn warehouse”. Costs after this point are the buyer’s.
Example: A UK supplier sells cosmetics to an Estonian brand on CPT Tallinn. The supplier books and pays road transport from Manchester to Tallinn. The pallets are damaged on the ferry: the risk had already passed when the truck collected the goods in Manchester, so the buyer must claim on its own cargo insurance.
When CPT makes sense
- The seller has better freight rates than the buyer and can add transport to the price.
- The buyer wants a delivered price but is happy to insure the goods itself.
- Air or road shipments where CFR, a sea-only rule, does not fit.
If you want the seller to insure as well, use CIP. If you want the seller to carry the risk all the way, use DAP.
Frequently asked questions
Who carries the risk during the main journey under CPT?
The buyer. Risk passes when the goods are handed to the first carrier, even though the seller has paid for transport to the destination.
Does CPT include insurance?
No. Neither party must insure under CPT. The buyer usually insures because it carries the risk in transit.
Can CPT be used for sea shipments?
Yes. CPT works for any transport mode, including container shipments by sea.
Who clears import under CPT?
The buyer, who also pays duty and import VAT.
