{"id":65765,"date":"2021-11-28T16:39:38","date_gmt":"2021-11-28T08:39:38","guid":{"rendered":"https:\/\/jingsourcing.com\/?p=65765"},"modified":"2024-07-09T15:42:44","modified_gmt":"2024-07-09T07:42:44","slug":"b-incoterms-cpt","status":"publish","type":"post","link":"https:\/\/jingsourcing.com\/b-incoterms-cpt\/","title":{"rendered":"CPT Incoterms \u2013 All Basics about Carrige Paid To Explained"},"content":{"rendered":"\t\t
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Learning about different shipping rules and regulations can help you in numerous ways as an importer and exporter. Shipping depends on a different set of policies, which are called \u201cIncoterms.\u201d There are different kinds of incoterms, and each one has its own obligations, duties, benefits, and flaws for both parties.<\/p>

So let\u2019s focus on CPT Incoterms and understand how these policies affect buyers and sellers.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Contents<\/p>

  1. What Is CPT Incoterms?<\/a><\/li>
  2. Examples of CPT Incoterms<\/a><\/li>
  3. CPT Responsibilities for Sellers<\/a><\/li>
  4. CPT Responsibilities for Buyers<\/a><\/li>
  5. What Sellers Have to Do under CPT<\/a><\/li>
  6. What Buyers Have to Do under CPT<\/a><\/li>
  7. Advantages and Disadvantages of CPT Incoterms<\/a><\/li>
  8. CPT Incoterms Price – Who Pays for the Service?<\/a><\/li>
  9. When to Use CPT Incoterms?<\/a><\/li>
  10. Are CPT Incoterms Good for Importing Products from China?<\/a><\/li>
  11. Comparison – CPT Incoterms vs. Other Incoterms<\/a><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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    What is CPT Incoterms?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\"Incoterms\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t
    Click to enlarge<\/i><\/figcaption>\n\t\t\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    CPT stands for \u201cCarriage Paid To,\u201d and it is one of the shipping incoterms published by ICC<\/a>.<\/p>

    CPT terms seem to be much more favorable to the buyer than the seller. To understand this point, suppose a deal is made using a CPT agreement. The exporter (seller) has prepared the order to send it to the buying party (importer\/seller).<\/p>

    So, after clearing all the export duties, the exporter will find a carrier service on its behalf so the ready-to-deliver goods reach their final buyer. Furthermore, the carrier service charges will not be paid by the importer, but they will also be the exporter’s responsibility.<\/p>

    So what would the buyer (importer) do to obtain goods from the seller\u2019s chosen carrier service? He will receive his order from the port of destination. Then, he will transfer all the contents in the cargo to his place.<\/p>

    From this point, the buyer must arrange the carrier service from the destination port to transfer goods to their premises (warehouse, factory, or any location).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Example of CPT Incoterms<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    To understand CPT’s meaning in shipping, let\u2019s pay attention to this example.<\/p>

    Suppose Mr. Josh is a seller from China exporting 25,000 pieces of cotton shirts to Mr. Anderson, a buyer\/importer from Canada. And both parties have mutually decided to work on CPT terms.<\/p>

    When the delivery date was near, Mr. Josh contracted his carrier, Mr. Kay, to deliver the consignment from a major Chinese port<\/span> (port of origin) to the decided port in Canada (the port of destination).<\/p>

    Mr. Josh paid all the shipping, carrier, and export documentation expenses. And when the goods reached the port of destination, Mr. Anderson took charge by clearing out the import duty and arranging his own carrier to pick up the goods from the destination port and deliver them to his warehouse by paying all the expenses<\/a>.<\/p>

    Both parties decided not to take any insurance policy<\/span><\/a> in this entire transaction, as they were not obligated according to the CPT Incoterms.<\/p>

    So, if something unfavorable happened to the goods when they left the port of origin until they reached the port of destination, Mr. Josh (the seller) was the sole person to bear the cost of the damaged or lost goods.<\/p>

    Likewise, if the goods were broken, missed, or damaged during the pickup process from the port of destination to Mr. Anderson\u2019s warehouse, he (the buyer) was responsible for bearing all the loss without claiming any compensation from Mr. Josh.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    CPT Responsibilities for Sellers<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Following are the sellers\u2019 responsibilities in CPT Incoterms:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Add Your Heading Text Here<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Your duty is to pack the sold products in a way that meets the standard of export quality packaging<\/a> of the buyer\u2019s country. By no means you can ignore these standards if you wish to make your import and export deal successful.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Loading Chargers<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    All the charges related to loading goods from the seller\u2019s warehouse onto the truck are one of the seller’s prime responsibilities.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Transporting Goods to the Origin Port<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    While opting for a transportation method is still your choice, you will have to load the goods using your means and then transport the truck, mini-van, or any other carriage from your warehouse to the place (usually a port) where the vessel would be waiting to leave.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Expenses Related to Terminal Handling at the Port of Origin<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    As a seller (exporter), you need to get yourself prepared to pay for the \u201cOrigin Terminal Charges<\/a>,\u201d also known as \u201cOTHC,\u201d when your cargo ship leaves the terminal of origin.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Carriage Loading Charges<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    When the goods reach the port of origin (export port), the seller is liable to cover the costs associated with loading goods on the carriage (cargo vessel or cargo airplane).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Freight Costs<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    When moving cargo from the port of origin to stopping at the port of destination, the seller is obliged to pay the entire freight expense without any exception.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Destination Terminal Handling Charges<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    What\u2019s more? Remember \u201cOTHC\u201d payment? Well, there\u2019s another charge called the \u201cDTHC\u201d or \u201cDestination Terminal Handling Charges.\u201d And these are also paid by the exporter when the cargo is reported at the destination terminal.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    CPT Responsibilities for Buyers<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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    Even for buyers\/importers, CPT Incoterms states a few responsibilities, like:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Delivery to Final Destination<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Upon receiving the goods, the importer must find ways to get imported products loaded on a carrier from the port of destination so they could be taken to his factory, warehouse, or any other suitable place of his choice.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Unloading Charges<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Once the goods reach to the final destination from the destination port, the seller has to pay the unloading charges<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Import Taxes, Import Duty, and Customs Clearance<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    The buyer must pay all the fees related to the import. This includes but is not limited to penalties, customs examinations<\/a>, holding charges, import duty, import taxes, and customs clearance<\/a>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    What Sellers Have to Do under CPT<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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    You must obey these CPT obligations if you are exporting goods under these Incoterms. Here they are:<\/p>