CPT
CPT (Carriage Paid To) is the Incoterm where the seller contracts and pays for carriage of the goods to a named destination — but risk transfers to the buyer earlier, when the goods are handed to the first carrier. So the seller pays freight to the destination while the buyer bears the risk of loss or damage in transit from the point of the first carrier onward.
This split between where cost ends (destination) and where risk ends (first carrier) is the defining, and often misunderstood, feature of the C-terms. CPT can be used with any mode of transport and is the multimodal equivalent of CFR.
The trap in CPT is assuming that because the seller pays freight to the destination, the seller also bears the risk to the destination — they do not. Risk passes at the first carrier, so the buyer needs their own transit insurance even though the seller is paying the freight. Getting this split right avoids uninsured losses.
Where does risk transfer under CPT?
When the goods are handed to the first carrier — not at the destination, even though the seller pays carriage there.
What is the difference between CPT and CIP?
CIP is CPT plus seller-arranged insurance to the destination; under CPT the seller has no obligation to insure.