Incoterms 2020 CPT: Spotlight on Carriage Paid To

There are 11 Incoterms 2020 rules. These globally-recognized trade terms, published by the International Chamber of Commerce, determine how costs and risks are split between buyers and sellers conducting international transactions, and when the risk or liability for the goods transfer from the seller to the buyer. This video takes a closer look at the Incoterms rule CPT, also known as Carriage Paid To.

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Carriage Paid To Responsibilities and Risk

Under the Incoterms 2020 rules, CPT means the seller is responsible for clearing the goods for export and delivering them to the first carrier or another person stipulated by the seller at a named place of shipment (usually a foreign freight terminal) at which point risk transfers to the buyer. The seller selects and pays the international carrier, and is responsible for loading and offloading goods at the named place of destination. Some buyers don't realize that though the seller routes the international carrier, the buyer carries the risk during the main carriage.

Since this is a standard export transaction, the seller or its agent is responsible for submitting the Electronic Export Information (EEI) through AESDirect on the ACE portal.

CPT can be used for any mode of transportation.

Using Carriage Paid To

With all of the C-group terms, including CPT, the seller is responsible for contracting international transportation. The named place where the transfer of responsibility occurs is always on the buyer’s side.

CPT is beneficial to the seller when a letter of credit is used or in other situations where the seller needs to control the export process.

It may be advantageous for a buyer to use CPT when the seller has greater buying power and can negotiate better rates for transportation.

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Chapters
00:00 Introduction
00:44 Carriage Paid To Responsibilities and Risk
01:39 Using Carriage Paid To
02:20 Incoterms Chart of Responsibilities

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