What is Carriage Paid To?
Carriage Paid To (CPT) is an Incoterms 2020 rule for any mode of transport under which the seller contracts and pays for carriage of the goods to a named place of destination, but risk passes to the buyer once the goods are handed to the first carrier at the agreed place of delivery. Like CIP, it therefore has two critical points: the place where risk transfers and the destination to which freight is paid. The seller clears the goods for export, while the buyer handles import clearance, duties and any charges not included in the contract of carriage. CPT carries no obligation for either party to insure, which distinguishes it from CIP. It is the multimodal counterpart of CFR, which should be reserved for sea and inland waterway shipments loaded on board a vessel.
Why it matters for forwarders
Because the seller pays freight but the buyer bears transit risk, the buyer must arrange its own cargo insurance from the point of delivery, a gap that is easily missed when the buyer assumes the 'paid to' destination means seller risk. Disputes often arise over destination charges: terminal handling, delivery orders and unloading at destination are the seller's cost only if included in the contract of carriage, so forwarders should make the quote's scope explicit. The seller must provide the usual transport document and notify the buyer so it can take delivery. Naming a precise delivery place matters, as risk may otherwise pass at a point chosen by the seller. CPT is commonly used for air freight and containerised cargo where handover happens at a terminal or airport rather than ship's rail.