CPT Incoterms: What Carriage Paid To Means
for E-Commerce Sellers (2026)
CPT means the seller pays freight to your destination. But insurance is on you. And customs. And duties. Here is what CPT actually covers and what it leaves out.
Quick Answer:
CPT (Carriage Paid To) is an Incoterms 2020 rule where the seller arranges and pays for freight to the named destination. It works with any transport mode. The seller has no obligation to provide cargo insurance. Risk transfers when goods reach the first carrier, meaning the buyer carries risk during the entire transit without seller-arranged insurance. The buyer also handles import customs, duties, and unloading. CPT is essentially CIP without the insurance. For e-commerce sellers, the lack of insurance under CPT creates a risk gap that should be addressed with a separate cargo policy.
What Is CPT (Carriage Paid To)?
CPT is one of 11 Incoterms published by the International Chamber of Commerce (ICC). It works with any mode of transport: air, ocean, multimodal, or rail.
Under CPT, the seller handles two things:
- Arranges carriage to the named destination
- Pays for freight to that destination
The seller does NOT provide insurance. The seller does NOT handle import customs. The seller does NOT pay duties.
Here is the risk structure that makes CPT unique among the "C" terms: the seller pays for freight all the way to the destination, but risk transfers to the buyer at the first carrier near the origin. In practice, this means:
- You (the buyer) carry the risk of loss or damage during the entire transit
- The seller paid for the transportation but is not responsible if something goes wrong during the journey
- You need to arrange your own cargo insurance to cover this gap
If this sounds like an odd arrangement, it is. CPT exists because some buyers prefer to control their own insurance policies (better terms, higher coverage, trusted insurer) rather than relying on whatever the seller arranges. If you want the seller to also arrange insurance, use CIP. See CIP Incoterms.
Key Takeaway: CPT = seller pays freight, but no insurance. Risk is yours from the first carrier. Always arrange your own cargo insurance under CPT.
CPT in the "C" Terms Family
All four "C" Incoterms share one feature: the seller arranges and pays for carriage. Here is the quick map:
| Term | Seller Pays Freight | Seller Provides Insurance | Transport Mode | Risk Transfers |
|---|---|---|---|---|
| CPT | Yes | No | Any mode | At first carrier |
| CIP | Yes | Yes (Clauses A, all-risks) | Any mode | At first carrier |
| CFR | Yes | No | Ocean freight only | On board vessel |
| CIF | Yes | Yes (Clauses C, minimum) | Ocean freight only | On board vessel |
CPT vs CIP: Add insurance and you get CIP. See CIP Incoterms.
CPT vs CFR: Same concept but CFR is restricted to ocean freight transport. CPT works for air, rail, multimodal, and ocean freight. See CFR Incoterms.
CPT vs DDP: Under CPT, the seller pays freight. Under DDP, the carrier handles freight, insurance, customs, and duties. CPT leaves insurance, customs, and duties entirely to the buyer. See our DDP shipping guide.
Want freight, insurance, customs, and duties in one price? DDP carriers on AiDeliv compete for your shipment.
Get DDP Rates →CPT Responsibilities Breakdown
Seller's Obligations Under CPT
| Obligation | What It Means |
|---|---|
| A1: General | Provide goods and commercial invoice |
| A2: Delivery | Deliver goods to the first carrier at the named place |
| A3: Risk transfer | Risk passes at the first carrier (not at destination) |
| A4: Transport | Arrange and pay for carriage to the named destination |
| A5: Insurance | No obligation to provide insurance |
| A6: Transport document | Provide transport document covering carriage to destination |
| A7: Export clearance | Handle export formalities |
| A8: Checking/packaging | Package goods for transport |
| A9: Cost allocation | Pay freight and all costs to destination. Not import duties. |
| A10: Notices | Notify buyer of dispatch details |
Buyer's Obligations Under CPT
| Obligation | What It Means |
|---|---|
| B1: General | Pay the agreed price |
| B2: Taking delivery | Accept delivery at the named destination |
| B3: Risk transfer | Bear all risk from the first carrier onward (entire transit) |
| B4: Transport | No obligation (seller arranges) |
| B5: Insurance | No obligation, but strongly recommended given risk starts at origin |
| B6: Transport document | Accept the transport document |
| B7: Import clearance | Handle ALL import customs, duties, and taxes |
| B8: Inspection | Pay for inspection if required |
| B9: Cost allocation | Pay import duties, taxes, customs fees, unloading, and insurance |
| B10: Notices | Notify seller of destination requirements |
When CPT Makes Sense
CPT is a niche term for e-commerce sellers. It works in specific situations:
You have a preferred insurance provider. Some businesses maintain annual cargo insurance policies with specific insurers that offer better terms, higher limits, or broader coverage than what a seller would arrange. Under CPT, you use your own policy.
Your company policy requires centralized insurance. Larger importers often manage insurance centrally across all suppliers and shipments. CPT lets the seller handle freight while the buyer's insurance department covers everything.
Air freight where you want the seller to book the flight. For air shipments where you want the supplier to arrange air cargo (because they have better local rates) but you handle your own insurance, CPT with the named destination as your nearest airport or carrier terminal works.
You should NOT use CPT when:
- You do not have your own cargo insurance policy (you will be uninsured during transit)
- You want everything handled by one party (use DDP)
- You want seller-arranged insurance (use CIP)
- You are shipping by ocean freight only and the seller quotes CFR (use CFR, it is the same concept for ocean)
Common Mistakes with CPT
Mistake 1: Shipping under CPT without arranging insurance.
This is the biggest CPT mistake. The seller pays for freight but NOT insurance. Risk transfers at the first carrier. If your cargo is damaged in transit and you have no insurance, you absorb the entire loss. The seller paid for the transportation, but that does not make them responsible for your goods during the journey.
Mistake 2: Confusing "carriage paid to" with "delivered to."
CPT does not mean the seller delivers to your warehouse. The seller pays freight to the named destination, but goods may arrive at a port, terminal, or carrier depot. You handle customs clearance before you can take delivery. If customs holds your shipment for 10 days, you pay storage.
Mistake 3: Not specifying two places in the CPT contract.
Under CPT, two locations matter: (1) where the seller delivers goods to the carrier (risk transfer point) and (2) where the freight is paid to (the named destination). If you only specify the destination and not the delivery-to-carrier point, disputes about where risk transferred become difficult to resolve.
Mistake 4: Choosing CPT to save money over CIP.
The cost difference between CPT and CIP is the insurance premium the seller would pay. For most shipments, this is 0.3-0.5% of cargo value. Saving $30-50 on a $10,000 shipment by skipping insurance is not a risk-reward calculation that makes sense.
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Run a DDP Auction →Frequently Asked Questions
What does CPT mean in shipping?
CPT stands for Carriage Paid To. The seller arranges and pays for freight to a named destination. The seller does not provide insurance. Risk transfers at the first carrier. The buyer handles customs, duties, and should arrange separate insurance.
What is the difference between CPT and CIP?
CPT has no insurance obligation. CIP requires the seller to provide all-risks insurance (Clauses A). Everything else is identical. If you want seller-arranged insurance, use CIP. See CIP Incoterms.
What is the difference between CPT and CFR?
CPT works for any transport mode. CFR is ocean freight and inland waterway only. Both require the seller to pay freight with no insurance obligation. For ocean-only shipments, either works. For air or multimodal, CPT is the correct term. See CFR Incoterms.
Do I need insurance under CPT?
CPT does not require either party to arrange insurance, but you absolutely should. Risk transfers to you at the first carrier, meaning you carry risk during the entire transit. Without insurance, any loss or damage during the journey is your financial responsibility.
Is CPT common in e-commerce?
Not common. Most e-commerce sellers use FOB (they arrange freight and customs) or DDP (the carrier handles everything). CPT is used when the buyer wants seller-arranged freight but prefers to manage insurance independently. For simplicity, DDP is the better option for most online sellers.
Related Incoterms and Resources
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