What does CPT mean under Inco Terms 2020?

CPT – CARRIAGE PAID TO (named place)

Under International Commercial Term 2020, CPT means Carriage Paid To, followed by named place.  The detailed named place with year of Inco Terms rules may preferably mentioned in the sale agreement of goods between buyer and seller, so as to enable the buyer and seller for smooth handling of movement of goods in terms of risks of costs and damages.  

CPT (Carriage Paid To) terms of delivery known as one of the omini modal terms of delivery can be used for all modes of transport – sea, air or land.  Under CPT terms, the place of delivery of goods takes place at buyer’s country.  Under international trade, the control over main carriage is with Exporter (seller).  According to Incoterms 2020 CPT terms, the exporter decides Carrier of the goods for on carriage and he is the in charge of carrier selection, thereby control over freight cost of on carriage.  The cost of export customs clearance and export documentation is absorbed by the exporter (seller) under CPT terms of delivery of goods.  The responsibility of proper packaging of goods to reach final destination is with the Seller in all Inco Terms of delivery of goods.

Importantly note, under CPT terms, the responsibility of seller is to arrange and pay the freight only to the named place mentioned.  The risk of damage or loss of goods transfers from Seller to buyer as soon as the seller delivers goods to the carrier.  If multiple carriers are involved, the seller’s responsibility on damage and loss of goods ends at the time of delivering goods to the first carrier.  In other words, under CPT terms, the risk does not pass equally with the cost from Seller to Buyer. 

Who takes care of Insurance under CPT terms?

Inco Terms 2020 is silent on the responsibility to be taken care either by seller or buyer, unless otherwise the letter ‘I’ mentioned in three letter words of incoterms.  So under CPT terms of delivery of goods, insurance may be arranged either seller or buyer as per their understanding mentioned in the Sale Contract mutually.

Usually, CPT terms are used for the movement of goods to warehouse and inland dry ports.  CPT terms of delivery is also suitable for movement of goods from one warehouse to another.  CPT terms of delivery is used for movement of goods on LCL (Less Cargo Load) basis and break bulk movement.

CPT – Carriage Paid To (named Place)

The above information is about CPT, Carriage Paid To a named location under delivery rules for movement of goods designed by ICC under Incoterms 2020.  Shere below your thoughts about CPT below:

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