Glossary term
Carriage Paid To (CPT)
Carriage Paid To is an Incoterms rule where the seller pays transport costs to a named destination.
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What Is Carriage Paid To (CPT)?
Carriage Paid To, or CPT, is an Incoterms rule used in international sale of goods contracts. Under CPT, the seller pays for carriage to a named destination, but the risk of loss may transfer to the buyer earlier, when the goods are handed to the carrier.
This split between cost and risk is the heart of CPT. The seller may be paying freight to the destination while the buyer may already bear transportation risk after carrier handoff.
Key Takeaways
- CPT is an Incoterms rule for international trade contracts.
- The seller pays carriage to the named destination.
- Risk can transfer before the goods arrive at that destination.
- CPT can be used for any mode of transport.
- The contract should name the destination and the Incoterms version clearly.
How CPT Works
In a CPT transaction, the seller arranges and pays for transportation to the named place. The seller usually handles export clearance. The buyer typically handles import clearance, duties, taxes, and risks after the delivery point specified by the rule.
The named destination matters for cost allocation, but it does not necessarily mark the point where risk transfers. Buyers and sellers often misunderstand this because the phrase “paid to” sounds as if the seller is responsible until arrival.
CPT Responsibilities
Responsibility | Typical CPT treatment |
|---|---|
Carriage to named destination | Seller arranges and pays. |
Export clearance | Usually seller responsibility. |
Insurance | Not automatically required from the seller under CPT. |
Import clearance and duties | Usually buyer responsibility. |
Risk after carrier handoff | Often buyer responsibility, depending on the contract and rule details. |
CPT Versus CIP
CPT is often confused with Carriage and Insurance Paid To, or CIP. The main practical difference is insurance. Under CIP, the seller must arrange insurance for the buyer's benefit. Under CPT, the seller pays carriage but does not automatically have the same insurance obligation.
That difference can matter for high-value, fragile, or time-sensitive goods. If the buyer bears risk after carrier handoff, the buyer should understand whether insurance is in place and who can file a claim.
Where It Shows Up
CPT can appear in purchase orders, commercial invoices, letters of credit, freight documents, and customs paperwork. It affects landed cost, shipping responsibilities, insurance decisions, and dispute resolution.
Incoterms do not decide every contract issue. They do not replace payment terms, title transfer, product specifications, breach remedies, or all tax and customs obligations.
The Bottom Line
Carriage Paid To means the seller pays transport costs to a named destination, but risk may transfer earlier. CPT works best when the contract clearly identifies the place, Incoterms version, insurance expectations, and import responsibilities.