CPT Incoterms  

CPT stands for “Carriage Paid to” the named place of destination, which means that the seller pays for the goods to be transported to the specified destination. The difference between CPT and the CIP term is that the buyer in the CIP term needs to purchase goods insurance to cover the risk of loss or damage to the goods during transportation, and pay insurance premiums. The risk of loss or damage to the goods, as well as any additional costs incurred after the goods have been delivered to the carrier, are transferred from the seller to the buyer. Additionally, the seller is responsible for completing the customs formalities for exporting the goods. The CPT term is applicable to various modes of transportation, including multimodal transport. Under the CPT term, the seller’s delivery location can be any loading point within the exporting country, including inland or coastal ports. The seller is responsible for completing the customs formalities for exporting the goods regardless of the place of delivery. 

When transacting under CPT terms, the seller is responsible for the transportation and cost of delivery from the loading location to the agreed-upon destination. Therefore, when quoting prices to customers, the seller must carefully calculate transportation costs and consider them in the final price of the goods. This includes taking into account the distance of transportation, the usual routes, and the fees or price trends for various transportation methods to avoid over- or under-quoting. 

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The primary obligations of the seller include: 

delivering the goods to the carrier within the time frame specified in the contract and promptly notifying the buyer to facilitate timely insurance arrangements. The seller is also responsible for completing export formalities and obtaining export permits or other approval documents, entering transportation contracts, paying transportation fees to the destination, bearing all expenses and risks until the goods are delivered to the carrier, providing commercial tax payment certificates (invoices), and providing usual transportation documents for the goods to reach the agreed-upon destination. If the buyer and seller agree to use electronic communication, all documents can be replaced by exchange of electronic data with equal validity. 

The main obligations of the buyer include: 

Paying the price according to the contract, handling the import procedures for the goods and obtaining import licenses or other approvals, bearing all costs and risks of the goods after delivery to the carrier, handling insurance procedures and paying insurance premiums, receiving the goods delivered by the seller according to the contract and accepting corresponding documents. 

Under CPT conditions, issues such as whether handling charges are included in the freight and expenses incurred by the seller assisting the buyer in handling related matters should be clarified in advance by both parties. Under CPT conditions, all risks of loss or damage to the goods are transferred from the seller to the buyer from the time the goods are handed over to the carrier or the first carrier, and the buyer is responsible for the risks of the goods during transportation. In order to clarify the responsibilities of both parties for the costs and risks they bear and to prevent intentional delays in receiving the goods and transferring risks, if additional expenses and risks are caused by the buyer’s failure to notify or receive the goods on time, the buyer should bear the responsibility. 

When the transaction is made under CPT conditions, both parties generally agree on the shipping cost and destination so that the seller can make transportation contracts at his own expense and deliver the goods to the carrier on schedule. If the buyer has the right to determine the loading time and/or destination, the buyer should give sufficient notice to the seller to facilitate the seller’s performance of the delivery obligation. After handing over the goods to the carrier, the seller should notify the buyer that the goods have been delivered, so that the buyer can collect the goods from the carrier at the specified destination. If the delivery location is not agreed or commonly determined, the seller can choose the most suitable location for its requirements at the given destination. 

Similarities between CPT and CFR: 

For example, both are terms of delivery where the seller arranges for the shipment of the goods to the agreed destination and the freight cost is included in the price. The buyer assumes the risk of loss or damage to the goods during transportation. 

Differences between CPT and CFR: 

For example, CFR only applies to maritime transport, while CPT is applicable to any mode of transport, including multimodal transport. Furthermore, there are differences in the specific place of delivery, the specific allocation of costs and risks, and the documents used. Therefore, the buyer and seller need to fully understand and negotiate these differences before signing the contract to ensure a smooth transaction. 

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