CPT: Carriage Paid To (Incoterms® 2020)

Under CPT the seller pays the freight to the named destination, but the risk passes to the buyer much earlier, when the goods are handed to the first carrier in the seller's country.

Quick facts

TransportAny mode

Delivery and risk pass to the buyerHanded to the first carrier in the country of shipment

Main freight paid bySeller

InsuranceNot required

Export clearanceSeller

Import clearance and dutiesBuyer

Unloading at destinationBuyer

How to write it

CPT + the named place of destination + Incoterms 2020, for example: CPT Lagos Incoterms 2020. It is wise to also state where delivery happens, such as "delivery at Incheon Airport".

What the seller does

Clears the goods for export.
Contracts and pays for carriage to the named destination.
Hands the goods to the first carrier, which is when delivery and risk pass.
Gives the buyer the usual transport document and tells it the goods are on their way.

What the buyer does

Takes the risk from the handover to the first carrier.
Insures the goods in transit if it wants cover; it is not required.
Pays unloading at destination unless the seller's carriage contract includes it.
Clears the goods for import and pays duties and taxes.

When to use it

CPT suits containers, air freight and multimodal transport when the seller can get good freight rates but does not want to carry transit risk. It is the any-mode version of CFR.

Common mistakes

The buyer thinking the seller carries the risk until arrival. The seller pays the freight, but the buyer carries the risk in transit and should insure.
Naming only the destination. Because risk passes at origin, agree where exactly the goods are handed over.
Arguing later about destination charges. Costs that the seller's carriage contract covers stay with the seller.

CPT vs CIP

They are identical except that under CIP the seller must also buy insurance for the buyer's benefit, with all-risks ICC (A) cover. Choose CIP when the buyer expects insured goods, or when a letter of credit requires an insurance document.

A plain-language summary of Incoterms® 2020 for everyday use. The full rules are published by the International Chamber of Commerce (ICC), and your contract wording decides. Incoterms® is a registered trademark of the ICC.

All 11 Incoterms 2020 rules

Common questions

Where does risk pass under CPT?

When the seller hands the goods to the first carrier in the country of shipment, not at the destination named in the rule.

Does CPT include insurance?

No. Neither party must insure under CPT. Because the buyer carries the risk in transit, the buyer usually arranges cover.