Incolearn – Learning more about Incoterms 2000

CARRIAGE PAID TO (CPT) PART I – Introducing Carriage Paid To The International Chamber of Commerce (ICC) defines the seventh Incoterm, Carriage Paid To (CPT), at a named place of destination, as “the seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to named destination. This means that the buyer bears all the risks and any other costs occurring after the goods have been delivered”. Should more than one “carrier” be used, the risk passes when the goods have been delivered to the first carrier. Carriage Paid To is the third of four (4) C-terms also known as the main carriage paid terms, the others being Cost and Freight (CFR), Cost, Insurance and Freight (CIF), and Carriage and Insurance Paid To (CIP). This term can be used irrespective of the mode of transport and includes multimodal transport. According to Professor Jan Ramsberg, the chairman of the ICC Working Party on Trade Terms, the seller’s primary duty is to contract for carriage, deliver the goods to the first carrier, provide a clean transport document, arrange export clearance, pay the loading costs, and pay unloading costs if for his account under the contract of carriage. The buyer’s primary duty is to accept delivery of the goods when they have been delivered to the carrier, to receive the goods from the carrier, and to pay those costs not for the seller’s account under the contract of carriage. The documents required in terms of the contract of sale should be the commercial invoice, the transport document, and an export licence if necessary. Other documents required would be those needed for the transit of the goods through any country or for import clearance. The three critical points of CPT are firstly, that the seller must arrange the carriage. Secondly, that the risk transfers from the seller to the buyer when the goods have been delivered to the first carrier, and thirdly, the cost transfers at the port of destination, buyer paying those costs that are not for the seller’s account under the contract of carriage. Next week’s issue will focus on the seller’s obligations under Carriage Paid To (CPT).