Incoterms 2020 · Any mode
CPT (Carriage Paid To): who pays what
The short answer
Who pays what under CPT
| Step | Under CPT |
|---|---|
| Export clearance | Seller |
| Main freight | Seller |
| Cargo insurance | Buyer (not required) |
| US customs clearance | Buyer |
| US import duty and fees | Buyer |
| Unloading at destination | Buyer (unless the carriage contract includes it) |
| Risk passes to the buyer | When the goods are handed to the first carrier, in the origin country |
In the contract, CPT is followed by the place of destination the seller pays carriage to: for example "CPT Chicago, Incoterms 2020".
What CPT means for a US importer
CPT splits cost and risk at two different places: the seller pays the freight all the way to the named destination, but the goods travel at the buyer's risk from the first carrier on.
Neither party has to insure. Because the goods travel at your risk, a buyer usually buys its own cargo insurance under CPT.
US customs value under CPT
A CPT price includes the international freight. US customs value leaves out international freight and insurance (19 U.S.C. 1401a(b)(4)(A)), so your broker deducts the freight when the invoice or freight bill shows it.
Check the duty for your product in the Gateway tariff calculator.
Watch out for
- The seller picks the carrier and the routing, so you lose control of transit time and visibility.
- Destination charges not in the seller's carriage contract can still land on you at arrival.
CPT questions
Who carries the risk during transit under CPT?
The buyer. Risk passes when the goods are handed to the first carrier, even though the seller pays the freight to the destination.
Does CPT include insurance?
No. CPT does not oblige either party to insure. CIP is the same rule with insurance the seller must buy.
Is the freight in a CPT price dutiable in the US?
No. US customs value excludes international freight and insurance, so the freight is deducted when it is shown separately.
Sources
- International Chamber of Commerce: Incoterms 2020
- International Trade Administration (trade.gov): Know Your Incoterms
- 19 U.S.C. 1401a(b)(4)(A): price actually paid or payable
Incoterms® is a registered trademark of the International Chamber of Commerce. This page explains the rule in our own words; the ICC publication is the authoritative text.