CPT
Carriage Paid To
Seller pays carriage to destination, but risk transfers at first carrier. Like CFR but for any transport mode.
Visual Guide - Cost & Risk Transfer
Obligations & Cost Breakdown
Seller Obligations
- Arrange and pay carriage to destination
- Clear for export
- Deliver goods to first carrier
Cost Responsibility:
Buyer Obligations
- Accept delivery at destination
- Import clearance
- Arrange insurance (risk transfers at first carrier)
Cost Responsibility:
Risk Transfer Point
When goods handed to first carrier
Insurance Requirement
Buyer's responsibility (critical - risk transfers early at first carrier)
Real African Trade Examples
Vegetables: Kenya → UK
CPT JKIA NairobiFresh green beans and mangetout
Kenyan horticultural exporters have competitive air freight contracts. CPT allows seller to offer a landed cost without insurance obligation.
CIP London to include all-risks insurance
Textiles: Madagascar → France
CPT AntananarivoOrganic cotton T-shirts
Malagasy garment exporters use CPT for air freight where they have negotiated rates with carriers.
FCA Antananarivo Airport if buyer arranges freight
Common African Trade Usage
Used for air freight exports where sellers have negotiated carrier rates. Common for perishable goods (vegetables, flowers) going from East Africa to Europe. Also used for multimodal intra-African trade where road + rail segments are involved.
Common Mistakes with CPT
Not Understanding Risk Gap
The Mistake: Buyer thinks risk transfers at destination because seller pays for carriage to destination.
The Problem: Like CFR, risk transfers at the FIRST carrier - not at destination. If goods are damaged in transit, buyer bears the loss.
The Solution: Buyer must arrange cargo insurance from origin. If unsure, use CIP which includes all-risks insurance.
When to Use CPT
Best For
- Multimodal transport
- Air freight
- When seller has good freight rates
- Container shipments
Avoid When
- When buyer expects insurance from seller
- When buyer doesn't understand risk gap