What Is Carriage Paid To?

Carriage Paid To (CPT) is an international trade term that means the seller delivers the goods at their expense to a carrier or another person nominated by the seller. The seller assumes all risks, including ꦚloss, until the goods are in the care of the nominated party.

The carrier could be the person or entity responsible for the carriage (by sea, rail, road, etc.) of the goods or the person or entity enlisted to procure the performance of the carriage. The CPT price mไight include Terminal Handling Charges (THC) in their freight rates.

Understanding CPT

Carriage Paid To (CPT) is an Incoterm, which is a set of standardized international trade terms that are published by the 澳洲幸运5官方开奖结果体彩网:International Chamber of Commerce.

In a CPT transaction, the seller must clear the goods for export and deliver them to a carrier or appointed person at a mutually agreed-upon (by the seller and buyer) destination. Also, the seller pays the freight char♛ges to transport the goods to the specified destination.

The risk of damage to the goods or loss is transferred from the seller to the buyer as soon as the goods have been delivered to the carrier. Theꦺ seller is responsible only for arranging freight to the destination and not for insuring the shipment of the goods during transport.

🐈 The term CPT is typically used in conjunction with a d🐓estination. For example, CPT Chicago means that the seller pays freight charges to Chicago.

Example of CPT

The financial responsibility for freight costs also includes export fees or taxes required by the country of origin. However, the risk is transferred fr꧙om the seller to the buyer as soon as the goods are delivered to the first carrier, even if multiple means of transportation (land, then air, for example) are employed.

So if a truck carrying a shipment to the airport encounters an accident in which the goods are damaged, the seller is not responsible for damages if the buyer has not insured the products because the goods had already been transferred to the first💯 🥀carrier: the truck.

This can put the buyer at some risk in that the seller has an incentive to find the cheapest means of transportation without any special concern for the💫 safety of the product while in transit.

To offset this risk, the buyer may consider a Carriage and Insurance Paid To (CIP) agreement, by which the seller also insures the products during transit. 

The seller may also choose an interim place to deliver the goods, rather than to the buyer’s fina𓃲l destinati🌌on, provided it has been mutually agreed upon beforehand by the seller and buyer. The seller only pays freight charges for delivery to this interim place.

This situati🏅on may arise if the buyer can arrange for freight to the eventual destination at a significantly cheaper rate than the seller or if the goods are in such demand that the seller can dictate terms.

Advantages and Disadvantages of CPT

T🦩he advantages and disadvantages of CPT depend on which side of the transaction you are on. The advaꦡntage of CPT for the buyer is that it significantly reduces the risk of transporting goods.

Conversely, this increases the risk of tra꧙nsporting goods for the se𝕴ller as they are responsible for any loss or damage until the goods are in the hands of the carrier.

CPT, though, could have an advantage to a seller in that it might make the buyer more inclin༒ed to make a 💝purchase.

F💮or example, if the buyer is looking to purchase a product but is hesitant due to the risks of transportation from a supplier far away, they may not make the purchase or they might make the purchase from a supplier that is closer but not necessarily bette♔r.

If a supplier takes on the responsibility of all expen🃏ses till they reach the carrier, reducing the risk for the buyer, the buyer may be more inclined ꦜto make the purchase.

CPT is also advantageous to the buyer because it removes the hassle of all paperwork and bureaucracy. The seller would handle all the legal aspects of shipping the goods, such as arranging the carrier, taking care of customs duties, taxes, and🔯 other formalities related to exporting the goods.

CPT vs. Cost, Insurance, and Freight (CIF)

澳洲幸运5官方开奖结果体彩网:Cost, Insurance, and Freight (CIF) is slightly different from CPT. The primary difference is that CIF only applies to maritime shippin▨g, per Incoterms.

The seller is responsible for the costs, insurance, and freight for transporting goods up until they are loaded on the shipping vessel at port. From that point on, the responsibility is with the buy﷽er.

CPT, on the other hand, covers a variety of shipping methods, such as land, air, and maritime, and holds the seller acc꧋ountable only till the goods are delivered🦹 to the first carrier in the transportation process.

The Bottom Line

The International Chamber of Commerce (ICC) outlines a variety of transportation terms that vary in the degree of responsibilitﷺy held by either the buyer ꦦor the seller.

Carriage Paid To (CPT) places the majority of the responsibility and cost on the seller, as it stipulates that the seller must absorb a🌸ll costs and risks until the goods are delivered to the first carrier in the transportation chain.