CPT, or Carriage Paid To, refers to a shipping term where the seller is responsible for paying the freight to a named place of destination. Unlike the CIP (Carriage and Insurance Paid To) term, which requires the seller to obtain insurance for the goods against loss or damage during transit, CPT does not impose this obligation.
Under CPT, the seller is responsible for paying the freight costs to transport the goods to the designated destination. However, the risk of loss or damage to the goods, as well as any additional costs arising from incidents that occur after the goods have been handed over to the carrier, are transferred from the seller to the buyer once the goods are delivered to the carrier. Furthermore, the seller is responsible for completing the export customs clearance procedures for the goods. This term is applicable to all modes of transport, including multimodal transport.
CPT can be applied to any means of transportation, including multimodal transport. Under this term, the seller's delivery point can be any shipping location within the exporting country, such as ports along rivers or coasts. Regardless of where the delivery takes place, the seller must handle the customs clearance for export.
When trading under CPT terms, the seller bears the responsibility for transporting the goods from the point of shipment to the agreed-upon destination. Therefore, it is crucial for the seller to accurately calculate freight costs when providing quotations. The seller must ensure that the freight charges are factored into the overall price of the goods.
In calculating freight costs, the seller should consider factors such as the distance of transport, typical shipping routes, and the current rates or trends in freight charges to avoid quoting prices that may be either too high or too low. This careful consideration helps prevent issues with pricing and maintains competitiveness in the market.
