CPT | Carriage Paid To

CPT | Carriage Paid To

CPT (named place) INCOTERMS 2020

CPT means the seller has delivered its liabilities when he/she arranges for the transportation and pays for it up to the named place and releases the goods to the transport service provider and in doing this, the risk is transferred from the seller to the buyer.

What you really need to watch for:

• When the goods are handed over to the transport service provider, the risk is totally transferred from the buyer to the seller which means, the seller does not have any liability on the sound and safe arrival, or even arrival of the goods,  at the named place of destination.
• The risk is transferred from the buyer to the seller on release of the goods to the transport service provider, however, the seller has to choose the transport service provider and pays for the transportation of the goods up to the named place.
• Based on above details, there are two important locations in CPT, the first is where the goods are delivered to the transport service provider (which is the risk transfer location), and the second is the location which the seller pays the transportation cost for.
• This rule can be used for any mode of transportation or when there are several mode of transport to be used to get the goods to the named place.
• It is strongly recommended that both parties specify both these locations as precisely as possible, specially when there are more than one mode of transportation. If it is not specified precisely, the location where the goods are handed over to the first transport service provider is the risk transfer location, by default. It is important to note that this location, is not the location which is used in the standard wording structure of the CPT rule. For example, CPT Frankfurt INCOTERMS 2020 means the seller has to choose the transport service provider and pay for the transportation costs up to Frankfurt, while the risk is transferred from the seller to the buyer at a location where the goods are handed over to the transport service provider.
• If based on the transport service contract between the seller and the transport service provider, any unloading costs at final destination occurs, the seller can not ask the buyer to pay for it separately.
• In CPT, the seller should clear the cargo for export at the origin, but the seller is not responsible for the import clearance cost at the country of destination. Also, the seller is not responsible to arrange or pay for any customs clearance charges for the transit of the goods through the countries the goods move through (if there is any), unless such responsibility and costs are already covered in the transportation service contract and already paid for by the seller.
• In CPT, the seller chooses the transport service provider and pays for it while the seller is not liable on any probable loss of or damage to the goods during transportation. That means, if you are the buyer, you should be very cautious to use this term.
• Based on above explanation, if you are the buyer, we suggest you choose the transport service provider yourself and agree on the transportation cost with the seller, then introduce the transport service provider to the seller. This way, you can at least qualify the transport service provider, however, as a buyer, it is indeed much better to use FCA instead of CPT.