Why CPT Matters in International Trade
In international shipping, using the right Incoterms is not just about terminology—it’s about clearly defining who pays, who takes the risk, and who handles customs. One of the most flexible and widely used terms is CPT – Carriage Paid To.
But what exactly does CPT mean in shipping? How does it differ from CIF, CIP, or DDP? When should exporters or importers choose CPT over other Incoterms?
This 2025 guide explains everything you need to know about CPT, including responsibilities, risk transfer, insurance, and real shipping examples.
What is CPT in Shipping?
CPT stands for Carriage Paid To, which means the seller pays for the main transportation of the goods to a named place of destination. However, the risk transfers from the seller to the buyer once the goods are handed over to the first carrier.
In short: the seller pays for transport, but the buyer bears the risk from the moment of carrier handover.
CPT is part of the Incoterms 2020 rules published by the International Chamber of Commerce (ICC). It can be used for any mode of transport, including sea freight, air freight, rail freight, and multimodal shipping.
When Should You Use CPT?
CPT is ideal for situations where the seller can secure competitive transportation rates and is willing to manage the main carriage, but doesn’t want to bear cargo risk beyond origin.
CPT is often used when:
The shipment involves air freight or multimodal transport
The buyer prefers to manage customs clearance in the destination country
The seller wants to provide delivery to a specific place (e.g. airport, port, rail station) but not door-to-door
Insurance responsibility is placed on the buyer
Example use cases:
Shipping electronic components from Shenzhen to Frankfurt Airport by air freight
Rail freight from Zhengzhou to Warsaw under CPT Poland Rail Station
Multimodal shipping from China to inland Russia via rail + truck
CPT Buyer and Seller Responsibilities (Who Does What?)
Understanding CPT Incoterms responsibilities helps avoid confusion and costly disputes during shipping.
Here’s a clear breakdown of who does what under CPT:
| Task / Responsibility | Seller | Buyer |
|---|---|---|
| Export packaging | ✅ | |
| Inland transport in origin country | ✅ | |
| Export customs clearance | ✅ | |
| Loading at origin | ✅ | |
| Freight charges to named destination | ✅ | |
| Risk from handover to first carrier | ✅ | |
| Insurance (optional under CPT) | ✅ | |
| Import customs clearance | ✅ | |
| Import duties and taxes | ✅ | |
| Unloading at destination | ✅ | |
| Final inland transport (if needed) | ✅ |
Under CPT, the seller covers the main carriage, but risk transfers to the buyer early in the process—right after the goods are handed to the first carrier.
CPT Risk Transfer Point: When Does Buyer Take Responsibility?
One of the most important things to understand about CPT is the risk transfer point. It occurs when the goods are handed over to the first carrier, not when the goods reach the destination.
Common Misunderstanding:
Many importers assume that because the seller pays for shipping, they also carry the risk—but that’s not true under CPT.
Example:
A seller in China arranges CPT to New York Airport.
The goods are loaded onto a truck and handed over to the airline in Shanghai.
During loading, the crate is damaged.
Who is responsible? → The buyer, because risk passed once the goods were handed to the air carrier.
If you’re the buyer under CPT, you should consider cargo insurance, especially for valuable goods or long-haul routes.
CPT vs CIP, CIF, DDP, and FOB (2025 Comparison Table)
Choosing the right Incoterm can save money and avoid confusion. Here’s how CPT compares to other common shipping terms:
| Term | Seller Pays For | Risk Transfers At | Insurance Included? | Suitable Transport Modes |
|---|---|---|---|---|
| CPT | Freight to named destination | When goods handed to carrier | ❌ Buyer must insure | Any mode (incl. air/rail) |
| CIP | Freight + minimum insurance | When goods handed to carrier | ✅ Seller insures | Any mode |
| CIF | Freight + insurance to destination port | When goods loaded on vessel | ✅ Seller insures | Sea & inland waterway |
| DDP | All charges incl. import duty/taxes | Final delivery point | ❌ Optional | Any mode |
| FOB | Up to loading on vessel (origin port) | Once goods are loaded on ship | ❌ Buyer insures | Sea & inland only |
Summary:
Use CPT if you want the seller to pay freight but take on minimal responsibility.
Use CIP if you also want the seller to provide cargo insurance.
Use DDP if you want the seller to handle everything, including customs clearance.
Does CPT Include Insurance?
A common question in international trade is:
“Does CPT include cargo insurance?”
The answer is: No.
Under CPT, the seller is not obligated to insure the goods during transportation. While the seller pays for the freight to the destination, the buyer bears the risk once the goods are handed to the carrier at origin.
Buyer Tip:
If you’re importing valuable, fragile, or time-sensitive goods under CPT terms, it’s strongly recommended to:
Purchase marine or air cargo insurance
Use a reputable freight forwarder to assist with coverage
Clearly specify in the contract if insurance is required
If you want the seller to provide insurance, consider switching to CIP (Carriage and Insurance Paid to) instead.
CPT Shipping Examples (Air, Sea, Rail)
To fully understand how CPT works, let’s look at some real-world scenarios.
Air Freight Example – CPT Los Angeles Airport
Chinese seller agrees to ship LED components under CPT LAX
Seller pays for air freight from Shenzhen to Los Angeles
Risk transfers once cargo is handed over to airline at PVG
Buyer arranges customs clearance and last-mile delivery
Sea Freight Example – CPT Rotterdam Port
Seller books sea freight to Rotterdam under CPT
Freight paid to port, but risk passes to buyer once cargo is loaded onto container vessel in Shanghai
Buyer handles import customs in the Netherlands
Rail Freight Example – CPT Warsaw Rail Terminal
Seller uses China-Europe Rail service via Chengdu
Freight paid to Warsaw terminal
Buyer covers risk after goods are loaded onto train at origin
These examples show how CPT allows flexibility in transport mode, but still shifts risk early in the process.
Pros and Cons of Using CPT in Shipping
Like any Incoterm, CPT has both advantages and potential drawbacks depending on the shipping scenario.
Benefits of CPT:
Works for any mode of transport
Seller controls the main carriage, often securing better rates
Simple for sellers who don’t want to deal with import procedures
Ideal for multi-modal or air freight shipping
Drawbacks of CPT:
Buyer carries risk early—even before the goods leave the origin country
No insurance required from the seller
Buyer has limited control over the first leg of transportation
Disputes may arise if carrier selection leads to damage or delay
CPT is best used when both parties are experienced in handling international freight and insurance, and when the buyer wants more control after handover.
CPT and Customs Clearance: Who Handles It?
When using CPT (Carriage Paid To), customs clearance responsibilities are clearly divided between the seller and the buyer.
| Step | Responsibility |
|---|---|
| Export customs clearance | ✅ Seller |
| Import customs clearance | ✅ Buyer |
| Export duties (if applicable) | ✅ Seller |
| Import duties & taxes (VAT, etc.) | ✅ Buyer |
Under CPT, the seller handles all documentation and export declarations in the origin country. The buyer is responsible for clearing customs, paying import taxes, and arranging local delivery at the destination.
Don’t assume that CPT includes door-to-door service—it only covers delivery to the named destination point (like a port or terminal), not final delivery to your warehouse.
Common Mistakes to Avoid When Using CPT
Choosing the right Incoterm is only half the battle—proper execution matters. Here are some common mistakes importers and exporters make with CPT:
Mistake #1: Confusing CPT with DDP
CPT doesn’t cover taxes, duties, or final delivery. Don’t assume it’s an “all-in” solution.
Mistake #2: Not Buying Insurance
Sellers under CPT are not required to insure cargo. Buyers must plan accordingly.
Mistake #3: Unclear Delivery Location
Always name the exact destination place—e.g. “CPT Los Angeles Airport” vs. “CPT Los Angeles” to avoid disputes.
Mistake #4: Not Confirming Carrier Details
The choice of carrier matters. A poor carrier choice by the seller can cause delays or damage, but the buyer still bears the risk.
Frequently Asked Questions About CPT (FAQ)
What does CPT mean in shipping terms?
CPT means “Carriage Paid To.” The seller pays for freight to a named location, but risk transfers to the buyer when the goods are handed to the first carrier.
Is CPT better than CIF or CIP?
It depends. CIF and CIP include insurance (CIP even covers multimodal), while CPT leaves insurance to the buyer. CPT offers more flexibility for inland or air transport.
Does CPT include delivery to the buyer’s warehouse?
No. CPT only covers freight to the named place (e.g., airport or port). Final delivery is the buyer’s responsibility unless otherwise agreed.
Who pays customs duties under CPT?
The buyer pays all import duties, VAT, and clearance fees in the destination country.
Can I use CPT for sea freight?
Yes, but it’s more common with air freight, rail, and multimodal transport. For sea-only routes, CFR or CIF may be preferred.
Get Expert Help with CPT Shipping from China
Whether you’re new to international logistics or already importing on a large scale, using the right shipping terms like CPT can make a huge difference in your cost, risk, and delivery speed.
At Tonlexing, we help buyers and sellers:
Understand and apply the correct Incoterm
Handle export clearance and freight booking
Get clear quotes for CPT, DDP, CIF, FOB and more
Avoid hidden fees and reduce shipping risk
Contact us today for fast, accurate CPT shipping quotes from China to the USA, Europe, Middle East, and beyond.
