In this article, we’ll break down the carriage paid to meaning and how it works in real shipping scenarios. Furthermore, it will show how Airsupply helps simplify freight coordination under CPT agreements.
What does Carriage Paid To (CPT) mean?
Carriage Paid To (CPT) is an international shipping term defined under Incoterms 2020, where the seller covers the transport cost to a named destination. However, the buyer takes on all risks as soon as the goods reach the first carrier. This rule applies to all transport modes, including air, sea, road, rail, or any combination.
For example, a shipment labeled “CPT ABC Street, Boston” means the seller pays the freight to Boston. Once the goods reach the carrier’s location, the buyer bears any risk of damage or loss during transit.
This setup offers flexibility and is especially useful when sellers want to retain control over the logistics while passing risk earlier in the process.
In Carriage Paid To terms, the seller typically refers to the exporter, manufacturer, or supplier; Conversely, the buyer is usually the importer or consignee.
Seller and buyer obligations in CPT shipping terms
Seller's Responsibilities
The seller handles most of the upfront work in CPT shipping:
- Prepares the goods for transport, including inspection, accurate measurements, labeling, and packaging that meets international shipping standards.
- Delivers the cargo to the designated carrier at the agreed place and time.
- Bears all risk until the goods are in the carrier’s possession.
- Pays the main transportation cost to the named destination.
- Clears the goods for export, including duties, permits, or inspections required by the country of origin.
- Provides documents like the commercial invoice, transport proof, and any additional instructions the buyer needs to receive the cargo.
- Shares shipment details if the buyer plans to arrange insurance, though the seller has no obligation to insure the goods.
Buyer's responsibilities
Once the goods are handed over to the carrier, the buyer steps in:
- Pays for the goods bythe sales contract.
- Assumes risk from the moment the goods reach the first carrier.
- Handles import formalities, including customs clearance, import duties, VAT, and any local taxes.
- Supports the seller with any documents or approvals needed at the destination port.
- Confirms delivery location and timing, if previously agreed in the contract.
- Chooses whether to insure the shipment. It is not required but recommended when dealing with high-value or sensitive goods.
For businesses unsure how to divide shipping responsibilities, working with a trusted freight forwarder can save time and reduce costly mistakes. ASLG specializes in international freight coordination and Incoterms® compliance. From selecting the right carrier to managing export documents and clearing customs, our team ensures you stay aligned throughout the shipment process.
Risk transfer and cost allocation in Carriage Paid To
Under Carriage Paid To terms, the risk shifts from seller to buyer as soon as the first carrier receives the goods.
Generally, CPT Incoterm doesn’t require the seller to insure the cargo. Therefore, if the buyer wants to safeguard the shipment during transit, they should arrange insurance themselves. For high-value or sensitive goods, getting coverage is strongly recommended.
Here’s how the cost responsibilities break down:
Seller covers:
- Pre-carriage handling, including packing, labeling, and delivery to the first carrier
- International freight charges to the named destination
- Export documentation, duties, and any security-related fees
- Unloading at the destination terminal, if both sides include it in the agreement
Buyer covers:
- Insurance (optional)
- All costs after the goods are transferred to the carrier
- Unloading fees, unless the seller includes them in the freight contract
- Inland transport from the terminal to the final delivery point
- Import clearance, including duties, taxes, and VAT
Understanding this breakdown helps both parties avoid confusion and unexpected charges. When terms get tricky, Airsupply offers CPT shipping support to ensure your logistics flow smoothly and clearly.
CPT vs. other Incoterms
CPT vs CIP (Carriage and Insurance Paid To)
CPT and CIP both require the seller to arrange and pay for the main transport to the agreed destination. The key difference comes down to insurance.
With CIP, the seller must also provide cargo insurance with minimum coverage as outlined in Clause A of the Institute Cargo Clauses (or an equivalent policy). CPT, on the other hand, does not include insurance, leaving that responsibility to the buyer.
Example:
If you’re shipping electronics from Shenzhen to Berlin, CIP offers better protection for the buyer during transit. Conversely, CPT gives the seller more flexibility by eliminating the insurance obligation.
CPT vs CIF (Cost, Insurance, and Freight)
CIF applies only to sea freight. The seller covers cost, insurance, and freight to the destination port, but the buyer assumes risk once the goods are loaded onto the ship.
CPT, in contrast, across all transport modes or any combination. The seller pays freight to the named place, but the buyer takes on risk once the first carrier receives the goods.
Example:
A supplier in Ningbo shipping bulk cargo to Los Angeles by sea may opt for CIF shipping for its marine insurance coverage. However, if the cargo travels by truck to Shanghai and then by air to L.A., CPT offers broader flexibility.
Conclusion
Carriage Paid To is a versatile Incoterm that works well for multimodal transport. It is especially effective for importers with local agents who can manage terminal handling fees, coordinate customs clearance, and keep the supply chain on track at both ends.
At Airsupply, we specialize in CPT shipping strategies tailored for real-world logistics. Whether you’re navigating Amazon FBA delivery, handling dangerous goods, or coordinating multicarrier routes, our experienced freight team ensures smooth execution from pickup to POD. With deep roots in China and partners worldwide, we simplify the complexity behind every shipment.
