What is CPT (Carriage Paid to)?

CPT, short for “Carriage Paid to,” is an Incoterm® that obligates the seller to arrange and pay for the carriage of goods to a specified destination. Unlike FCA (Free Carrier), where the buyer handles transportation, CPT shifts the responsibility of arranging transport) to the seller. This term applies to any mode of transportation—road, rail, air, sea, or multi-modal—making it versatile for global trade.

Key Differences: CPT vs. CFR

While both CPT and CFR (Cost and Freight) require the seller to cover transportation costs, they differ in risk transfer and applicable modes:

• Risk Transfer:
  • In CPT, the risk of loss or damage transfers from seller to buyer when the goods are delivered to the carrier (or the first carrier in multi-modal transport).
  • In CFR, risk transfers when the goods are loaded onto the vessel (only applicable to sea or inland waterway transport).
• Transport Modes:
  • CFR is limited to maritime and inland waterway shipping.
  • CPT accommodates all transport methods, making it ideal for complex supply chains.

How CPT Works: Delivery and Risk Transfer

Delivery Obligation:
The seller must deliver goods to a carrier (or an agent nominated by the seller) at the agreed location within the specified timeframe. Unlike CFR, CPT does not require loading onto a vessel; delivery to the carrier completes the seller’s obligation.

Risk Transfer Principles:

• General Rule: Risk transfers to the buyer once the goods are delivered to the carrier. If multiple carriers are involved (e.g., in multi-modal transport), risk transfers when the goods are handed over to the first carrier.
• Exception: If the buyer fails to provide timely notice of shipping details or destination preferences, risk may transfer early—from the agreed shipment date or the end of the shipment period. This “risk pre-transfer” ensures fairness when the buyer delays in exercising their rights.

Critical Locations in CPT Contracts

• Delivery Point: The exact location where the seller hands over goods to the carrier (e.g., a warehouse in Wuhan). This is the risk transfer boundary.
• Destination Point: The final location specified in the contract (e.g., New York CY/CFS). The seller covers freight costs to this point, but 卸货费用 (unloading costs) at the destination are typically the buyer’s responsibility, unless included in the freight.

Example: In “CPT New York CY/CFS shipment from Shanghai,” the risk transfers when goods are delivered to the carrier in Shanghai, not Wuhan, even if the seller chooses an earlier delivery point.

LVFU’s Application of CPT in Renewable Energy Trade

As a global trader of renewable energy products (e.g., photovoltaic modules, energy storage systems), LVFU GmbH utilizes CPT to streamline cross-border logistics. By specifying clear delivery points (e.g., German ports or inland hubs) and leveraging multi-modal transport, LVFU ensures:

• Efficient risk management through precise carrier handover.
• Transparent cost allocation, with freight paid to destinations like Braunschweig or international hubs.
• Compliance with EU and Chinese trade regulations, optimizing delivery for solar and energy storage clients worldwide.

Practical Considerations for CPT Users

• Clarify Delivery and Destination Points:

Use specific locations (e.g., “CPT Istanbul Kumport”) to avoid disputes, especially for cities with multiple ports.

• Transport Contract Details:

Sellers must arrange carriage via usual routes and modes. For multi-modal trips (e.g., truck → rail → sea), define the first carrier’s role clearly.

• Documentation and Compliance:

Provide commercial invoices and proof of delivery to the carrier, as required by Incoterms®.

CPT offers flexibility for modern global trade, particularly for industries like renewable energy that rely on diverse transport networks. By understanding its risk transfer mechanisms and key locations, businesses like LVFU can optimize logistics, mitigate disputes, and ensure seamless cross-border transactions. Whether shipping via sea, air, or rail, CPT remains a strategic choice for sellers prioritizing cost control and clear contractual obligations.