Incoterm CPT explained

What is Incoterm CPT?
Incoterm CPT usually occurs when transporting goods in containers. This incoterm can be applied to any form of transportation. For example, transport by water, road, air or rail. The goods are delivered to the pre-arranged destination. This place can be in the buyer's country, but also in another country.

Incoterm CPT meaning
The meaning of CPT is Carriage Paid To (freight free to the agreed destination). If you as an exporter choose the CPT Incoterm, you are in a position to decide how you want the transport to be arranged. You enter into a transport agreement for this purpose. You indicate the CPT Incoterm by adding the place of transfer of the goods to the delivery condition.

CPT transport
Transport according to CPT is completely focused on the wishes of the seller. In fact, as the seller, you decide what the transport process will look like. This is advantageous for the seller because you have all the influence on the costs and transportation. However, it is important to make clear agreements with the buyer from the beginning about where the goods are to go and with which carrier this will take place.

Incoterm CPT costs
All transport costs are for the seller. As the seller, you are responsible for transportation from the beginning to where the goods are delivered. As the seller, you decide which carrier to use to transport the goods. The seller pays all costs for this transport. Any costs for exporting are also for the seller. Import costs, on the other hand, are for the buyer. These costs include import taxes and permits for importing goods. It is not compulsory for either party to take out insurance for the goods.

Obligations seller with CPT
If you choose Incoterm CPT you are obliged as a seller to arrange the entire transport. However, you are free to do this; using more than one modality is also allowed. The seller pays all transportation costs and ensures that the goods are delivered to the pre-agreed destination. Once the goods reach the first carrier, the seller no longer bears any risk. In addition, the seller is also responsible for arranging the export declaration with customs when goods have a destination outside the European Union. Also the responsibility for the export license or documents.

Buyer's obligations with CPT
From the moment the goods arrive at the first transport, the full risk lies with the buyer. As a buyer you are obliged to arrange all documents concerning the import of the goods. Think about customs formalities such as an import license and paying import taxes. Neither party is required to take out goods transport insurance, but they may do so.

Incoterm CPT vs. CIP
There is sometimes still some confusion about the difference between Incoterm CPT and Incoterm CIP. With both, the selling party is responsible for the entire transportation process. The seller ensures that the goods are delivered to their destination. During this process, however, the risk of damage and loss of the goods lies with the buyer. Whereas with CIP the seller is required to provide insurance for the buyer, this is not required with CPT. As a buyer, do you already have insurance, or would you like to be responsible for this yourself? Then you can use Incoterm CPT. Please note that taking out insurance is therefore not compulsory and self-evident with CPT, but it is with CIP.

Sea freight or air freight shipments with customs obligation?
Global shipments and shipments within Europe to/from non-EU countries are subject to customs obligations. What measures do you need to take and what documents are required? With the knowledge and experience of our specialists in the Rotra customs department, we are able to provide solutions for all your customs obligations that fit your logistics process while you focus on your own core business. For more info contact us directly.