Shipping CPT Incoterms 2020

CPT Incoterms 2020 : A Few Quick Points

  • Carriage Paid To (CPT) Incoterms can be used in any mode of transport.
  • Risk transfers from seller to buyer when the cargo is handed over to the carrier
  • The seller must pay for carriage to the agreed destination (named place)

When CPT is used in a contract, the named place is mentioned. For example, if a company in Brazil is selling on CPT terms to a company in Argentina – the sales contract should at least mention:

CPT (Puerto Rosales, Buenos Aires, Argentina, Incoterms 2020)

CPT Incoterms: Delivery & Transfer of Risks

Delivery happens when the seller hands over the cargo to the first carrier. As is always the case, it is highly advisable to define the point of delivery as accurately as possible in the sales contract, as there may be conflicts in understanding between first carrier and/or main carrier.

highly advisable to define the point of delivery as accurately as possible in the sales contract, as there may be conflicts in understanding

CPT Incoterms: Insurance

There is no obligation for the seller to provide or purchase insurance for the buyer’s benefit. However, if requested, the seller must provide the buyer with any information he/she may have that is required for the purchase of insurance.

CPT Incoterms: Carriage

The seller must arrange and pay for carriage from the point of delivery to the named place of the destination. The seller must abide by laws and meet all obligations relating to transport security regulations.

CPT Incoterms: Customs clearance

The seller must meet the obligations of export Customs clearance and the buyer must manage import Customs clearance. This would mean that respective parties responsible for export/import have to manage and pay for all formalities like licenses, security checks, inspections and other document submissions as required.

CPT Incoterms: Delivery/transport documentation

The seller must provide the buyer with related transport documents. The costs of providing such documents, original or otherwise will be paid for by the seller.

CPT Incoterms: Packaging & Marking

Seller must ensure and pay any costs related with ensuring that the cargo is delivered in acceptable condition. This would mean the seller has to pay for quality checks, weighing operations and/or counting etc. The seller must package the goods at the seller’s cost.

CPT Incoterms: Cost allocations

The allocation of costs between buyer and seller are as follows:

Buyer:

  • Any insurance cover requested
  • Any costs involved in obtaining documents for import clearance
  • Duties, taxes and other costs related to import (Seller has to determining HS code for export)
  • Any costs incurred due to a failure to give reasonable notice to seller when it is agreed that the buyer is allowed to choose the time for departure from origin or receiving at destination

Seller:

  • Transport and insurance costs to the named place
  • Transport security related costs
  • Cost of providing usual proof of delivery
  • Duties, taxes and other costs related to exports (Buyer has to determine HS code for import)
  • Any costs involved in obtaining documents for export clearance

CPT Incoterms: Notices

  • The seller must use the usual methods to notify the buyer that delivery has been made
  • The buyer must give the seller enough notice time to deliver the cargo at the buyer’s chosen time (if agreed that the buyer can choose the time)

We have a more comprehensive article on Incoterms 2020 that you can find here. This article also links to an Incoterms 2020 chart that provides comprehensive coverage of all important points traders need to know when choosing the right Incoterm to use for their shipments.

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