CPT or Carriage Paid To is an international shipping term (Incoterm) where the seller pays the transportation cost to deliver the goods to a named destination. However, the risk of loss or damage transfers from the seller to the buyer as soon as the goods are handed over to the first carrier, even though the seller pays for the freight.
CPT is widely used across road, rail, air, sea, or multimodal transport. The seller arranges and pays for transportation, while the buyer takes on all risks during transit once the goods are handed over to the carrier, along with import duties, taxes, and customs clearance at the destination.
How It Works:
- The seller prepares and dispatches the goods.
- The seller arranges and pays for transportation.
- Goods are handed over to the first carrier.
- Risk transfers to the buyer at that point.
- The buyer handles further risks and import procedures.
Benefits:
- Simplifies logistics planning for buyers
- Suitable for multimodal transport
- Clearly separates cost and risk responsibilities
- Widely used in international trade
Example:
An Indian exporter sells electrical motors to a buyer in Germany under CPT Hamburg. The Indian seller pays the shipping cost up to Hamburg, but once the goods are handed over to the shipping company in India, any damage during transit becomes the buyer's responsibility.