## CPT Incoterms 2020 | Meaning and Shipping Terms The CPT incoterm is an arrangement used in international trade by buyers and sellers for commercial proceedings and import/export affairs. The CPT rule is one of the [11 revised incoterms](/content/en-in/resources/blog/incoterms-2020 "Incoterms : Importance in International Trade & Changes in 2020"/index.html) published by the International Chamber of Commerce. ‘Carriage paid to’ (CPT) signifies a person’s accountability to bear responsibility for freight during transit. Under this arrangement, the sellers' role ceases to almost nil after paying the carriage duty till the designated port, and the remaining course of the transaction is the buyer’s duty. The rule is applicable for any mode of transportation. Here, the seller is liable for carriage, but he is not responsible for insurance, and the risk of goods is transferred after the delivery point. ## Shipping Terms in CPT - In this scenario, the place of destination is agreed upon by both parties. - The carriage responsibility stays with the seller. - The seller is not responsible for insurance. - Loading and unloading of goods at the target port can be agreed upon jointly by both the parties. - The risk is transferred from the buyer to the seller at the designated port. ## Seller’s Responsibility ### Delivery Terms The agreed upon destination can either be: **Case 1: First Port** The seller delivers the goods till the designated port (to the port of his country), hence he must bear the responsibility of transit from the warehouse to the port. **Case 2: Second Port** The seller arranges transit for transferring the goods from his premises to the first port, along with the carriage duties till the target port. ### Transfer of Risk The risk lies with the seller till the designated port, after which it transfers to the buyer. The loading and unloading of goods is agreed upon between the buyer and seller. ### Costs **Case 1: First Port** The seller pays for: - Maintaining goods - Freight forwarding agents' fees - Terminal charges at the port - Payment of inland transit from the warehouse to the designated port. **Case 2: Second Port** The seller is responsible for: - Maintenance of goods - Freight forwarding fees - Inland transit till the first port - Custom clearing charges - Payment for shipping. ### Duty & Custom Clearances CPT includes [customs clearance](/content/en-in/resources/blog/customs-clearance-process "Customs Clearance Process - All the Steps an Exporter Needs to Follow"/index.html). The seller carries out export custom proceedings, and all custom charges will be borne by him, delivering all necessary documents (e.g., [Bill of Lading](/content/en-in/resources/blog/bill-of-lading "Bill of Lading in Exports - Meaning & Types"/index.html), [Commercial Invoice](/content/en-in/resources/blog/commercial-invoice-meaning-format "Commercial Invoice in Export | Format & Documentation"/index.html), [Packing List](/content/en-in/resources/blog/export-packing-list "Packing List in Export : Format & More"/index.html)). ### Freight Terms Freight terms depend on: **Case 1: First Port** The seller has carriage responsibilities till the first port and is responsible for inland transportation. **Case 2: Second Port** The seller carries out freight proceedings till the importer’s port. ### Insurance In CPT, the risk passes to the buyer after the delivery point, and the seller is not obligated to pay for insurance. However, it would be wise for the seller to arrange for marine insurance, as the buyer may not be willing to cover this cost. ## Buyer’s Responsibility ### Delivery Terms **Case 1: First Port** The seller delivers goods till the first port; thus, he covers the carriage, customs charges, and inland transit responsibility. **Case 2: Second Port** The buyer is responsible only for inland transit from the designated port to the warehouse. ### Transfer of Risk The risk transfers from the seller to the buyer after delivery at the nominated place. The buyer bears responsibility for damage after this point. ### Freight Terms **Case 1: First Port** The buyer recognizes freight duties after the designated port, handling the import process and inland transit. **Case 2: Second Port** The buyer’s responsibilities begin after the goods reach the port of his country. ### Costs Costs to be borne by the buyer include: - Import customs clearance charges - Freight charges (in context to case 2) - Terminal charges - Inland transit expenses - Warehouse charges. ### Duty and Custom Clearances In both situations, the buyer bears the import duty responsibility and must provide documents for import proceedings. ### Insurance The buyer bears responsibility for goods damage and may choose to insure goods at his discretion. ## Difference between CIF & CPT > **Also read:** **[CIF Incoterms 2020 | Cost, Insurance & Freight](/content/en-in/resources/blog/cif-cost-insurance-freight-incoterms/index.html)** ## FAQs on CPT Incoterms ### What is CPT pricing? Pricing includes raw material, labor, packaging, and carriage costs till delivery at the nominated port. ### Does CPT include duty? Under CPT, customs clearance duty is shared by both parties for their respective areas. ### What are CPT payment terms? Costs are associated with carriage and shipping till the destination port; the seller covers until that point, while the buyer covers thereafter. ### What is the difference between FCA and CPT? In FCA, the delivery destination is decided by the buyer, whereas in CPT it is mutually agreed upon. ### Is CPT incoterms for air freight? CPT is applicable to any mode of transportation, including [air freight](/content/en-in/resources/blog/how-air-freight-shipping-works "How Air Freight Shipping Works in International Trade"/index.html). ### Who is responsible for insurance under CPT? Neither party has liability for insurance of goods; responsibility rests with the buyer. ### Who pays freight in CPT incoterms? The seller covers freight and shipping payments in CPT. ### What are the terms and conditions under the CPT contract? Conditions regarding the destination port and loading/unloading must be agreed upon by both parties. Carriage is conducted as per agreement, and risk transfers upon delivery.