Carriage Paid To (CPT)
The seller pays carriage to the named destination but does not insure; risk passes when goods are handed to the first carrier. Any mode.
Carriage Paid To (CPT) means the seller clears the goods for export and pays the carriage to the named destination, but does not insure. It is the "any-mode" counterpart of CFR: cost and risk split — risk passes to the buyer when the seller hands the goods to the (first) carrier, while the seller pays carriage to the agreed destination. Where several carriers are used, risk passes on handover to the first carrier, not at the final leg.
CPT suits any mode (road, rail, air, sea or multimodal) and is especially apt for containers and air freight. On the cost ladder it is like a multimodal CFR, below CIP (which adds insurance on top of CPT). Practical notes: because risk passes early at the first carrier and the seller does not insure, the buyer should arrange door-to-door cargo insurance itself; and the contract should pin down exactly which point the "destination" is (airport, inland depot, buyer's warehouse), since the carriage split and unloading responsibility depend on it.
FAQ
- What is the difference between CPT and CFR?
- They share the same structure (seller pays carriage, buyer bears transit risk, seller does not insure); the difference is scope: CFR is sea/inland-waterway only with risk passing "on board," while CPT applies to any mode with risk passing "to the first carrier." Use CPT, not CFR, for containers, air and multimodal.
- Under CPT, when does risk pass, and should the buyer buy its own insurance?
- Risk passes to the buyer when the seller hands the goods to the first carrier, well before arrival at destination. The seller pays carriage but does not insure, so the buyer should arrange end-to-end cargo insurance itself, or be unprotected for loss in transit.
Related terms
Sources: https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/