FOB and CPT under Inco terms 2020

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Loading at Seller’s premises

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Seller

Transportation from Seller’s

 premises to Load port

Seller

Seller

Transportation from Seller’s

premises to Load port

Seller

Seller

Unloading at Loading Port

Seller

Seller

Unloading at Loading Port

Seller

Seller

Loading 

Seller

Seller

Loading to Vessel

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Seller

Export documentation

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Seller

Export documentation

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Export Customs Clearance

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Export Customs Clearance

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Export Taxes and duties (if any)

Seller

Seller

Export Taxes and duties (if any)

Seller

Seller

Handling  at Load Port

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Seller

Handling  at Load Port

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Seller

Main Carriage

Seller

Buyer

Main Carriage (Vessel)

Buyer

Buyer

Import Customs Clearance

Buyer

Buyer

Import Customs Clearance

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Buyer

Import Documentation

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Buyer

Import Documentation

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Buyer

Import Taxes and Duties (if any)

Buyer

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Import Taxes and Duties (if any)

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Buyer

Transportation from named place to final destination

Buyer

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Transportation from destination

 port to named place

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Buyer

Unloading at port named

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Unloading at named place

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Buyer

Detailed posts about  FOB and CPT delivery rules are explained separately in this website.  You may click below to read:

FOB  Free On Board

CPT  Carriage Paid To

Hope the above information helps you in differentiating CPT delivery rules with FOB delivery rules.  You may share your comments below about the difference between FOB and CPT delivery terms under Incoterms 2020.

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CPT vs.FOB, a comparative study based on Inco terms 2020

The major difference between CPT and FOB delivery rules are given below.  This comparison between FOB and CPT is done based on the Inco Terms 2020 rules published by ICC.

FOB Vs.CPT

FOB means Free On Board at a named place agreed by buyer and seller mutually under their contract of carriage.  CPT means the Carriage Paid To a named place mutually contracted by buyer and seller.

When comparing both CPT and FOB, the following points may be noted:

FOB delivery rule under movement of goods is meant for to use as Marine restricted and is used for movement of goods by Sea and Inland waterways whereas CPT delivery rules  is used for all modes of transports.  However, 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.  

Under FOB, the destination named place is at seller’s side where under CPT terms, the destination named place is at buyer’s side.

Costs against main carriage is paid by seller under CPT where under FOB, the main carriage cost is under buyer’s responsibility.

The control over main carriage and freight handling is with the seller under CPT terms, but  the seller does not have any strength  over freight contract and main carriage under FOB delivery rules.

Buyer takes more risk under CPT where as the risk is minimum for FOB compared to CPT terms of delivery.  Because, under CPT terms although seller pays carriage to named placed in buyer’s country, the risks transfer from buyer to seller when goods are handed over to the Carrier.  But the risks and costs transfer from seller to buyer when goods are gone onboard the vessel under FOB terms.

Under CPT terms, buyer depends upon the seller for export general manifest details and other export data, as the seller undertakes the main carriage costs and posses control over the same.  But under FOB terms, buyer undertakes main carriage and takes over the control over main carriage freight control, thereby EGM and other export data from main shipping carrier.