Carriage Paid to Incoterm (CPT)

Logistics Term

What’s Carriage Paid to Incoterm (CPT)?

A Carriage Paid to Incoterm (CPT) is recognized globally to mean that a seller of a particular item delivers it at their own expense to a carrier. They take responsibility for risk during this transfer. CPT freight rates might involve Terminal Handling Charges (THC), export fees, and taxes. However, the costs and risks associated with the shipment transfer to the buyer where multiple carriers are involved. The seller only caters from the freight arrangement to the agreed destination but not the entire shipment of the goods during transport.

Advantages of Carriage Paid to Incoterm (CPT)

In a Carriage Paid to Incoterm, both the seller and the buyer have their set of obligations. The seller should cater for the loading charges, export packaging and marking, goods, pre-carriage and delivery, export licenses and customs formalities, cost of delivery at the named destination, proof of delivery, pre-shipment cost, and finally, commercial invoice and documentation. On the other hand, the buyer should cater for import formalities and duties, cost of import clearance pre-shipment inspection, and payment for goods as specified in the sales contract. It's important to acknowledge a Carriage Paid to Incoterm has several advantages. First, it aids sellers in making sales by covering the more significant part of the transportation risk. Also, it immensely decreases the buyer's transportation risk and eliminates the buyer's involvement in handling export requirements and costs.

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