Carriage Paid To

CPT stands for Carriage Paid To — one of the 11 Incoterms 2020 rules published by the International Chamber of Commerce (ICC). Under CPT, the seller arranges and pays for international carriage to a named place of destination. However, the risk of loss or damage transfers to the buyer when the goods are handed to the first carrier at the origin — not when they arrive. This creates a deliberate split: the seller pays for freight, but the buyer bears transit risk.

CPT stands for Carriage Paid To. The full expression is 'Carriage Paid To [named place of destination]' — for example, 'CPT Hamburg Port' or 'CPT Buyer's Warehouse, Munich'. The named destination must always be specified to make the term legally enforceable. CPT is one of the Incoterms 2020 'rules for any mode of transport' — it applies to air, sea, road, rail and multimodal shipments.

Under CPT, the seller handles and pays for export customs clearance in the country of origin. The buyer handles and pays for import customs clearance at the destination country — including all import duties, VAT, and local taxes. This is the same split as in DAP. The seller is not responsible for import customs even though they are paying for the international freight leg.

The buyer bears the risk of damage from the moment the seller hands the goods to the first carrier at origin. Even though the seller has paid for the freight, they have no liability for transit damage under CPT. The buyer should therefore arrange their own cargo insurance to cover transit risk. If the seller wants to be responsible for arranging insurance, switch to CIP instead — CIP mandates the seller to buy Institute Cargo Clauses (A) all-risk cover.

Both CPT and CIP require the seller to pay for freight to the named destination, and in both terms risk transfers when goods are handed to the first carrier. The only difference is insurance: under CIP, the seller must arrange all-risk cargo insurance (Institute Cargo Clauses A) in the buyer's name. Under CPT, insurance is optional and the decision is left to the buyer. CIP gives the buyer guaranteed transit coverage; CPT leaves the buyer exposed unless they arrange their own insurance.

Both CPT and DAP require the seller to pay for international carriage, but risk transfers at different points. Under CPT, risk passes to the buyer when the seller hands goods to the first carrier at origin — the buyer bears transit risk even though they are not paying for freight. Under DAP, the seller bears risk all the way to the named destination. For the buyer, DAP offers much better protection — if goods are lost in transit, the seller is liable under DAP but not under CPT.

CFR (Cost and Freight) and CPT are structurally very similar, but CFR is restricted to sea and inland waterway transport only — it cannot be used for air, road or multimodal shipments. CPT applies to any mode of transport. Under both terms, the seller pays for freight and the buyer bears transit risk. CFR risk transfers when goods cross the ship's rail at the loading port; CPT risk transfers when goods are handed to the first carrier. For modern containerised or multimodal logistics, CPT is always preferred over CFR.

FCA (Free Carrier) and CPT both allow any transport mode, but the seller's freight obligation differs. Under FCA, the seller delivers goods to a named place at origin (e.g., their warehouse or the port) and the buyer arranges and pays for international carriage. Under CPT, the seller also arranges and pays for international carriage to the named destination. FCA gives the buyer more control over carrier choice; CPT gives the seller control. Risk under both terms transfers at the same point — when goods are handed to the first carrier at origin.

The named place of destination is where the seller's freight cost obligation ends. This could be the destination port, a freight terminal, an airport cargo facility, or the buyer's premises. The more specific the named place, the more transport costs the seller is responsible for — 'CPT Buyer's Warehouse, Munich' means the seller pays for door delivery; 'CPT Hamburg Port' means the seller pays only to the port. Parties should always specify the most precise address possible in the contract.

Example: A Portuguese furniture exporter sells to a Norwegian retailer on CPT terms — 'CPT Oslo Warehouse, Buyer's Premises'. The seller books a road freight carrier from Lisbon, handles Portuguese export customs, and pays for the full door-to-door freight. When the truck departs from the Lisbon factory (first carrier handover), risk transfers to the Norwegian buyer. If the truck crashes in France, the buyer bears the loss — even though the buyer was not paying for the freight. Under CPT, the Norwegian buyer should have taken out their own cargo insurance. The seller's obligation was only to pay for transport — not to insure the goods.

The buyer pays all import customs duties, VAT and local taxes at the destination country under CPT. The seller only pays export customs in the country of origin. For EU imports, the buyer pays national VAT. For UK imports, the buyer pays 20% UK VAT and applicable customs duties. For US imports, the buyer handles CBP clearance and pays federal and state taxes. CPT is therefore a 'delivered freight-paid, duties unpaid' term — the buyer gets the freight included in the price but still has to handle and pay for customs.

CPT was carried over from Incoterms 2010 to Incoterms 2020 without fundamental changes. The ICC added guidance in 2020 clarifying that parties should specify the named place of destination as precisely as possible to avoid disputes. The 2020 edition also updated CIP (CPT's paired insurance term) to require Institute Cargo Clauses (A) — full all-risk cover — rather than the minimum (C) cover that was previously required. CPT itself remained unchanged: seller pays freight, risk transfers at first carrier.

CPT can technically be used for courier shipments but DAP is more common in practice. Courier rates are door-to-door, and the cost/risk split in CPT — seller pays, but buyer bears transit risk — can create confusion if the buyer does not understand they need their own insurance. Under DAP (the more common courier Incoterm), both cost and risk remain with the seller until delivery at the named destination. For parcel and express courier bookings, DAP produces a cleaner commercial arrangement.

Yes. CPT applies to all modes of transport — sea freight (FCL and LCL), air freight, road freight, rail and multimodal combinations. This distinguishes CPT from CFR, which is restricted to sea and inland waterway transport only. For multimodal shipments (e.g., sea + road from Shanghai to Munich), CPT is the correct term because the first risk transfer happens at the origin carrier handover, not at the port of loading. CPT is one of the Incoterms 2020 'any mode' rules alongside DAP, DDP, DPU, FCA and CIP.

The key risk for the buyer under CPT is that they bear transit risk even though they did not arrange and cannot control the carrier. If goods are lost, damaged or delayed in transit, the buyer has no contract with the carrier — only the seller has that relationship. The buyer's only protection is cargo insurance they arranged themselves. Without cargo insurance under CPT, a single transit incident can result in total loss with no claim possible against the seller. For high-value shipments, buyers should always request CIP instead of CPT, or independently arrange all-risk cargo insurance.