Incoterms
CPT (Carriage Paid To)
Incoterm under which the seller pays carriage to a named destination, but risk passes when goods are handed to the first carrier.
In four languages
CPT is the any-mode equivalent of CFR. The seller clears the goods for export and contracts and pays the transport to the named place, such as a rail terminal in Tashkent or a port in the Gulf. Risk passes at origin, when the goods are handed to the first carrier, which may be the truck taking them to the port. The seller has no duty to insure. Import clearance, duty and VAT are for the buyer. Because it works for road and rail as well as sea, and risk passes when control really changes, ICC recommends CPT instead of CFR for container cargo. Example: an Almaty buyer agrees CPT Almaty rail terminal with a supplier in Yiwu. The supplier books the train via Khorgos, but if the container is damaged on the way, the buyer bears the risk and should be insured.
Questions
What is the difference between CPT and CFR?
CFR is sea-only and risk passes on board the ship. CPT works for any mode and risk passes when the goods are handed to the first carrier.
Does the seller insure the goods under CPT?
No. The buyer should arrange insurance, because it carries the risk during the main transport.