CPT Incoterms: What Carriage Paid To Means
for E-Commerce Sellers (2026)

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:

1. Arranges carriage to the named destination
2. 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.

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.

Frequently Asked Questions

Related Incoterms and Resources