Compare between CPT and CIF

 Difference between CPT and CIF

Under this post we can discuss about the difference between CIF delivery rules  and CPT delivery rules as per Incoterms 2020 issued by ICC.

CIF means Cost, Insurance and Freight to a named destination mutually agreed between seller and buyer under contract of carriage incorporated  under their sale contract.   

CPT means,  Carriage Paid To a named destination both seller and buyer contracted .

What  are the differences between CPT AND CIF

One of the main differences between CIF and CPT is that CIF is meant for movement of goods by Sea and Inland waterways only whereas CPT may be used for all modes of transport.  . 

Under CIF terms,  the seller is responsible to arrange Insurance on movement of goods covering minimum clause.  However, under CPT terms keeps silent about insurance hence, the buyer or seller may arrange Insurance as per the mutual understanding under contract of carriage in Sale contract.  Under CIF terms,  insurance covering ‘all risks’ may be  arranged by paying additional premium as per the agreement between buyer and seller.

CPT is widely used to move goods from Warehouse to Warehouse, movement of LCL cargo, shipments under break bulk etc. especially to Dry ports and intermediary ports. CPT modes are used widely used for the shipments by air also.   CIF delivery rules are widely used for the movement of goods by sea with destination to a port in buyer’s side.

Under CIF, the seller transfers the risks involved in movement of goods  when goods  gone onboard the vessel.  Under CPT terms, the delivery takes place when goods are handed over to the carrier contracted by seller, where the risks are transferred from seller to buyer. 

Two web posts related to CIF and CPT explaining   both terms in detail in simple language  are available below to read.  You may click below to know easily to understand  both term CPT and CIF:

CIF  Cost Insurance and Freight

CPT  Carriage Paid To

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Hope the above information helps you in understanding the difference between CIF and CPT under delivery of goods in export import trade.