Carriage Paid to Incoterm (CPT)
Carriage Paid to Incoterm (CPT) Definition
A Carriage Paid to Incoterm (CPT) is recognized globally to mean that a seller of a particular item delivers it to a carrier at their own expense. 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, involving multiple carriers, are transferred to the buyer. The seller only caters to the freight arrangement to the agreed destination but only part of the 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, customs formalities, delivery cost at the named destination, proof of delivery, pre-shipment cost, and commercial invoice and documentation.
On the other hand, the buyer should cater for import formalities and duties, the cost of import clearance pre-shipment inspection, and payment for goods as specified in the sales contract. It's important to acknowledge that 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.