CPT (Carriage Paid To)

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Russian: CPT Фрахт/перевозка оплачена до (...названное место назначения)

Contents

General Provisions

In accordance with rules of Incoterms® 2010,[1] the CPT (Carriage Paid To) may be used irrespective of the mode of transport selected and may also be used where more than one mode of transport is employed. The CPT term is often used in sales where the shipment is by air freight, containerized ocean freight, courier shipments of small parcels, and in "ro-ro" (roll-on, roll-off) shipments of motor vehicles.

The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between the parties). In CPT, the named place of destination is domestic to the buyer. The seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. The seller fulfills its obligation to deliver when it hands the goods over to the carrier and not when the goods reach the place of destination. It is important to note that the transfer of risk from seller to buyer occurs at a different point than the transfer of costs (See the Table below). The parties are well advised to identify as precisely as possible in the contract both the place of delivery, where the risk passes to the buyer, and the named place of destination to which the seller must contract for the carriage. If several carriers are used for the carriage to the agreed destination and the parties do not agree on a specific point of delivery, the default position is that risk passes when the goods have been delivered to the first carrier at a point entirely of the seller's choosing and over which the buyer has no control. Should the parties wish the risk to pass at a later stage (e.g., at an ocean port or airport), they need to specify this in their contract of sale.

The parties are also well advised to identify as precisely as possible the point within the agreed place of destination, as the costs to that point are for the account of the seller. The seller is advised to procure contracts of carriage that match this choice precisely. If the seller incurs costs under its contract of carriage related to unloading at the named place of destination, the seller is not entitled to recover such costs from the buyer unless otherwise agreed between the parties. The CPT requires the seller to clear the goods for export, where applicable. However, the seller has no obligation to clear the goods for import, pay any import duty or carry out any import customs formalities.


Table 1. Seller's/Buyer's Responsibilities Allocation for Carriage Arrangements, Transaction Costs, and Risk Transfer as Stated by the CPT rule of Incoterms® 2010
Facilities3.png

Facilities4.png

Papers1.jpg

Customs.jpg

Truck.png

Train.png

Delivery.png Craneto.jpg Onboard.png Ship.png

Plane.png

Truck.png

Train.png

Onboard.png Cranefrom2.png De.png

Conterm.png

Truck.png

Train.png

Customs.jpg

Papers1.jpg

Importer1.png

Importer.png

Seller (Exporter), Named Place, Seller's Facilities Export Documents, Formalities, and Duties (if any) Pre-carriage to Named Place, Not Unloaded Delivery at Named Place / Port, Unloaded Ready for Loading at Named Place / Port of Shipment Loaded on Bord of Ship or Vehicle Transport by Air, Rail, Road, Water, or Multimodal On Board Ship or Vessel, Not Unloaded Discharging (Unloading) at Named Place / Port of Destination Delivery at Named Place / Terminal Onward Carriage to Named Place, Not Unloaded Import Documents, Formalities, and Duties Buyer (Importer) - Named Place, Unloaded
Seller's/Buyer's Responsibilities Allocation for a Contract for the Carriage of Goods as Stated by the CPT rule of Incoterms® 2010
Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► ●●Buyer► ●●Buyer►
Seller's/Buyer's Responsibilities Allocation for Transaction Costs as Stated by the CPT rule of Incoterms® 2010
Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► Seller►►► ●●Buyer► ●●Buyer►
Seller's/Buyer's Transaction (Loss/Damage of Goods) Risk Transfer as Stated by the CPT rule of Incoterms® 2010
Seller►►► Seller►►► Seller►►► Seller►►► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer► ●●Buyer►
Seller’s insurable interest [3]
Buyer’s insurable interest [3]

Summary on Buyer's and Seller's Responsibilities under CPT in Incoterms® 2010

Seller's Responsibilities (in brief) Buyer's Responsibilities (in brief)
Goods - Payment
  • Provide the goods, commercial invoice, and other documentation as required by the sales contract.
  • Pay for the goods as provided in the sales contract.
Licenses, Security, and Customs Formalities
  • Obtain any import licenses or authorizations and handle all import customs formalities.
Carriage
  • Contract or procure a contract for the carriage of the goods from the point of delivery to the named place of destination.
  • Buyer has no obligation [1] to the seller for carriage.
Insurance
  • No obligation [1] to provide insurance.
  • Provide information to enable the buyer to obtain insurance.
  • Buyer has no obligation [1] to the seller for insurance.
Delivery - Taking Delivery
  • Deliver the goods to the (first) carrier at the port of shipment (not place of destination).
  • Take delivery of the goods at the named place of destination as provided in the contract.
Risk Transfer
  • Assume all risks of loss or damage to the goods until they have been delivered to the (first) carrier at the place of shipment (not destination), within the agreed-upon time stipulated in the sales contract.
  • Assume all risk of loss or damage from the time the goods have been delivered to the (first) carrier at the place of of shipment.
Costs
  • Pay all costs until the goods have been delivered to the (first) carrier at the named place of shipment.
  • Pay all costs of loading and carriage to the named place of destination.
  • Pay for costs of unloading if unloading is included in the contract for main carriage.
  • Pay all costs relating to export, including customs formalities, duties, and taxes,
    • as well as costs required for transshipment through any country up to the named place of destination.
  • Pay costs other than main carriage after the goods have been delivered to the (first) carrier at the place of shipment.
    • Such costs include unloading, lighterage, and wharfage at the place of destination unless such costs were to be paid by seller under seller’s contract for carriage.
  • Pay all costs relating to import formalities, duties, fees, and taxes.
  • Pay costs of onward carriage.
Notice to the Buyer - Notice to Seller
  • Provide timely notice that the goods have been delivered to the (first) carrier and notice that enables the buyer to take timely possession of the goods at the named place of destination.
  • If, according to the sales contract, the buyer is entitled to specify a time or point of taking delivery at the named place of destination, to give seller sufficient notice.
Delivery and Transport Documents - Proof of Delivery
  • Provide the buyer with a transport document, dated within the period agreed, that allows the buyer to claim the goods at the named place of destination and (unless otherwise agreed) allows the buyer to sell the goods while in transit through the transfer of the document or by notification to the sea carrier.
  • If a negotiable transport document is issued, a full set of originals [2] must be given to the buyer.
  • Accept the seller’s delivery document [5] if it is in conformity with the sales contract.
Checking, Packing, Marking - Inspection(s)
  • Pay all costs associated with checking the quality and quantity of the goods to be in conformity with the sales contract.
  • Provide pre-shipment inspections as required for export formalities.
  • Package the goods, unless the goods are conventionally sold unpackaged.
  • Package the goods as the seller deems appropriate for transport, unless the buyer has given specific requirements prior to the finalization of the sales contract.
  • Provide marking appropriate to the packaging.
Other
  • Timely provide the buyer, at the buyer’s request and cost, assistance in securing information and documents, including security information, required by the buyer for import and transport of the goods from the named place to the final destination.
  • Reimburse the buyer for buyer’s costs related to securing information and documentation, including security information the seller requires for export formalities, transport, security clearance, and transshipment to the named place of destination.
  • Timely advise the seller of any security-related data requirements.
  • Reimburse the seller for seller’s costs related to securing information or documentation, including security information, that the buyer requires for import formalities, security clearance, and transport of the goods to the final destination.
  • Timely provide the seller, at the seller’s request and cost, with any documents and information required for export, transport, and security clearance of the goods to the named place of destination.


Examples [6]

  • CPT, AAA Rail Terminal 1, Ekaterinburg, Russia
  • CPT, ZZZ Consolidated Barge Terminal, Strassburg, France

Notes

  1. According to Incoterms rules, seller and buyer have reciprocal responsibilities only. The "no obligation" term often used in the rules of Incoterms means that one party has not obligation to the other party. In this case (Art. B.3.А - Incoterms® 2010) the buyer has obligation neither to arrange nor to pay the contract on carriage. The "no obligation" term has the same understanding for the both parties in the case of insurance. However, the "no obligation" term being applied to the second party does not mean that the task performance is out of the first party’s interests (Articles B.3.A and B.3.B in Incoterms® 2010). So, for the case of the CPT rule, despite the fact that the buyer has not responsibility to the seller for the contract on carriage, it is clear, that the buyer has an interest to have such a contract on carriage that will deliver the goods to the buyer’s place of destination safely and in the time stipulated.
  2. Original document, original of document, or, simply, original means in the context of international trade are presented by a signed (executed) and, usually, stamped official document which may be reproduced as facsimiles. An original document can exist as two or more 'copies,' each one of them marked 'original' and having equal legal force.[2] One overview of the current status of electronic public procurement in Europe[3] states that the use of original certificates is rare, and electronic certificates are equally uncommon. All correspondents indicate that original certificates are rarely required, and that copies are usually sufficient. It follows that, in an electronic context, unsigned scans would also be permissible. Indeed, in EU, 9 out of 32 countries (28%) explicitly indicate that unsigned scans or unsigned PDF files would also be permissible in most procurements. When electronic certificates are used, unsigned copies or unsigned originals are usually permitted, which substantially reduces cross border interoperability difficulties. The recognition of e-documents in an international business (logistics) is based on the same pillars as e-commerce does. Namely, in the European Union, as is the case for the e-Commerce Directive,[4] the Model Law[5] also embraces the concept of functional equivalence: i.e., traditional paper-based concepts such as "writing"(Article 6), "signature" (Article 7) and "original" (Article 8) are redefined in a way that allows electronic versions of these concepts to have the same legal value, provided that these can serve the same basic purposes and offer the same guarantees as in their traditional form. Therefore, EDI option is acceptable to produce e-documents in international/domestic transactions (sales contracts).
  3. While neither the buyer nor seller have obligation for providing insurance during the main voyage, both may have "insurable interest" and prudence may dictate purchase of insurance coverage.[6]
  4. The examples given hereto are to illustrate purposes concerning the syntax of Incoterms® 2010 rules and could conform with any real data occasionally only.
  5. Delivery document term used as the heading to article A8 (Incoterms® 2010) means a document used to prove that delivery has occurred. For many of the rules of Incoterms® 2010, the delivery document is a transport document or corresponding electronic record. Nevertheless [7], with EXW, FCA, FAS and FOB rules, the delivery document may simply be a receipt. A delivery document may also have other functions, for example as part of the mechanism for payment declaration: refers to comply with customs regulations and have met some of the requirements, including the, Enron, information or physical inspection of the obligation. Such requirements are particularly common in construction contracts with large contractors, government entities, and major corporations.
  6. The examples given hereto are to illustrate purposes concerning the syntax of Incoterms® 2010 rules and could conform with any real data occasionally only.

References

  1. ↑ Incoterms® 2010: ICC rules for the use of domestic and international trade terms – ICC Publication No 715E
  2. ↑ http://www.businessdictionary.com/definition/original.html
  3. ↑ Preliminary Study on the electronic provision of certificates and attestations usually required in public procurement procedure / European Commission Internal Market and Services DG, Brussels, 2008 – p.33. | http://ec.europa.eu/internal_market/publicprocurement/docs/eprocurement/ecertificates-study_en.pdf
  4. ↑ E-Commerce Directive | http://ec.europa.eu/internal_market/e-commerce/directive_en.htm
  5. ↑ UNCITRAL Model Law on Electronic Commerce Guide to Enactment 1996 with additional article 5 as adopted in 1998 | http://www.uncitral.org/pdf/english/texts/electcom/05-89450_Ebook.pdf
  6. ↑ CPT : Carriage Paid To | http://www.agilitylogistics.com.au/CPT.aspx?
  7. ↑ Financial terminology | http://financialterminology.info/2011/06/incoterms-2010-international-edition-b/
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