What is CPT
Abbreviation for Carriage Paid to ... Named Place of Destination (carriage paid ... named place of destination), Contract formula of the Incoterms developed by the ICC for foreign trade transactions.
CPT ("Freight paid by ...") is applicable to all modes of transport if the seller - at his own expense, but at the risk of the buyer - is to deliver the goods to a specific destination in the importing country. In contrast to CIF, this does not have to be a port; for a port, CFR would be applicable.
The seller fulfills his obligation if he delivers export-free goods, concludes the contract of carriage at his own expense and hands over the goods to the first (i.e. the one commissioned by him) carrier; the risk passes to the buyer (see above the distinction between freight forwarder and carrier; this is particularly important in the case of multimodal transport). The seller is not obliged to take out insurance.
CPT corresponds to CFR with the difference that the destination does not necessarily have to be a port, or FCA plus freight costs. The buyer bears all costs from the transfer of risk (i.e. from handover to the first carrier commissioned by the seller) that do not belong to the freight, i.e. possibly also unloading costs, if these are not included in the freight, and is responsible for the import processing. For example, CPT is often chosen up to an airport freight terminal in the country of destination. The clause is very common in practice because the buyer does not have to deal with the organizational process, but only with the import clearance.
The formulations occasionally used in practice such as "free border ..." (franco border, franco frontière) are misleading, as they should generally only cover the transport costs, but not the assumption of risk up to the border. Therefore one should agree on “CPT” instead. If the seller should nevertheless take on the risks, DAP (delivered at place) or DAT (delivered at terminal) attached.
Main obligations of the parties: 1. Obligations of the seller: (a) The seller has to conclude the contract of carriage on his own account.
(b) Delivery: The seller must hand over the goods to the carrier at the time agreed for delivery or within the agreed period for transport to the agreed location at the named destination.
(c) The seller must assume the freight costs that are necessary to transport the goods to the named destination.
(d) The seller must bear all risks of loss or damage to the goods until they have been delivered in accordance with (b).
e) This contractual clause obliges the seller to clear the goods for export.
2. Obligations of the buyer: The risk of loss or damage to the goods as well as all other costs that occur after delivery of the goods according to (b) are fundamentally borne by the buyer from this point in time.
3. Application: This contract formula can be used for any mode of transport, including multimodal transport.
See also EXW, FCA, FAS, FOB, CFR, CIF, CIP, DAT, DAP, DDP, Incoterms, C-Clauses, F-Clauses, D-Clauses.
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