What is the CPT Delivery Term?

The CPT delivery term refers to a method where all transportation costs are paid by the seller, while insurance and other expenses are covered by the importer. CPT is commonly used in multimodal transportation. During CPT shipping, the exporter prepares the cargo and handles customs procedures. Once the goods are loaded onto the main carrier and the freight charges are paid, the exporter’s responsibility ends.

Under CPT, the buyer’s responsibility begins when the goods are delivered from the carrier. This means that transportation, customs, and related costs up to the agreed point are borne by the seller, while any risks and costs after delivery fall on the buyer.

CPT should be carefully managed by both parties. The buyer assumes responsibility once the goods are handed over from the carrier, making them liable for any risks from that point onward. CPT often involves multiple carriers, and once the goods are handed to the first carrier, the seller’s obligations are fulfilled.

What Does CPT Mean?

​CPT (Carriage Paid To) refers to delivery where freight is paid up to the agreed destination. The seller delivers goods to a carrier of their choice, covering all costs up to the destination. Once the goods are handed over to the carrier, responsibility shifts to the buyer. Insurance arrangements and related costs are typically handled by the buyer. CPT is generally used for all transport modes except sea freight and is especially common in multimodal transport.

Advantages and Disadvantages of CPT

​CPT offers benefits for both buyers and sellers but also has drawbacks. Its growing popularity is due to time and energy savings, although varying country-specific procedures can create challenges. Under CPT, the seller is responsible up to a certain point, after which the buyer assumes responsibility, making it distinct from other Incoterms.

How Does CPT Work?

The process begins with the seller preparing goods according to the sales contract and completing customs formalities. A transport agreement is made, and freight costs up to the agreed port are paid. Once the goods are handed to the first carrier, the seller’s responsibility ends. The buyer is then informed of the shipment details.

Key Features of CPT

​CPT applies when freight is prepaid by the seller. It is commonly used in multimodal transport. The seller pays freight up to the destination, but risk transfers to the buyer once goods are handed to the first carrier.

Who Pays Freight Under CPT?

​The seller covers freight costs and customs expenses up to the agreed point. After delivery to the first carrier, all risks and additional costs fall on the buyer, including unloading charges if not included in the freight. The buyer also handles import documentation and any country-specific procedures.