Seller pays freight to destination — but risk transfers to buyer at the first carrier handover.
Carriage Paid To (CPT) requires the seller to arrange and pay for carriage to the named place of destination. However — and this is critical — risk transfers from seller to buyer when the goods are handed to the first carrier, not when they arrive at the destination. This means the cost obligation and risk transfer point are deliberately split. The seller pays for the full freight leg but the buyer bears the risk of loss or damage during transit. CPT is suitable for all transport modes. It differs from CIP only in that CPT does not require the seller to arrange insurance (though both seller and buyer are free to insure if they wish).
CPT suits sellers who want to quote freight-included prices (DDP-like pricing without covering import duties) but prefer the buyer to handle insurance. It is commonly used in multimodal shipments — road + sea, or road + air — where the seller has strong carrier relationships and can negotiate competitive freight rates. Also used when the buyer's country has restrictions on seller-arranged insurance.
Avoid CPT if the buyer does not understand the split risk/cost structure and may assume they are covered for transit damage. If you want the seller to also arrange insurance, use CIP instead. If you want a truly delivered term where the seller bears all transit risk, use DAP or DDP.
The buyer bears the risk of damage from the moment the seller hands the goods to the first carrier. Even though the seller has paid for the freight, they have no liability for transit damage under CPT. The buyer should arrange their own cargo insurance to cover this risk.
Both CPT and CIP require the seller to pay for freight to the named destination. The only difference is that under CIP, the seller must also arrange cargo insurance (Institute Cargo Clauses A — all risks). Under CPT, insurance is optional and typically left to the buyer.
Under CPT, risk transfers to the buyer when the goods are handed to the first carrier at origin. Under DAP, the seller bears the risk all the way to the destination. CPT gives the seller less transit risk exposure on paper (the buyer bears transit risk), while still requiring the seller to pay for freight.
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 (e.g., CPT buyer's warehouse vs CPT destination port).
CPT can be used for courier shipments, but in practice DAP is more common for courier/parcel deliveries since courier rates are door-to-door and the cost/risk split in CPT can create confusion. If you are quoting a delivered price for courier shipments, DAP (where both cost and risk stay with the seller until delivery) is cleaner.
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