The CPT Incoterm 2020 is one of 11 incoterms that were defined by the International Chamber of Commerce (ICC).
CPT Incoterm terms allow the seller to deliver the goods to the designated place. At that point, risk is transferred from the seller to the buyer. This agreement allows the seller to arrange transportation (freight costs are the seller’s responsibility), but not to take out insurance.
CPT Incoterm 2020 can be used for any type of transportation.
Once the goods have been handed to the carrier, the seller is responsible for customs clearance and freight. From that point, the buyer is responsible. If there are more than one carrier, the seller is responsible for giving the goods to the first carrier.
Carriers can be defined as shipping lines, cargo airlines, or railways.
CPT Incoterm can be used primarily for containerized cargo and bulk cargo.
Risk of CPT Incoterm 2020
The seller is responsible for the risk until the goods are delivered to the designated place. Once the goods have been delivered to the specified place, and the first carrier has acknowledged receipt of the goods, the seller’s liability ceases and the buyer takes over.
Cost:
The seller pays for packing, loading, transportation until the first carrier and terminal handling charges (origin and destination), custom clearance charges, duties, and air/ocean/surface freight. The buyer is responsible for customs clearance, including taxes and insurance, as well as local delivery to the destination.
An example for CPT Incoterm 2020:
With the help of an example, let us clearly understand CPT Incoterm and delivery terms.
Let’s say that a mobile phone manufacturer in Taichung, Taiwan, contacts a mobile phone distributor in Hyderabad, India. They begin to discuss further business.
Negotiations under CPT Incoterm 2020:
They have good connections with Taiwan freight forwarders and shipping lines, and can obtain good freight rates. The buyer decides that it is a good idea if the seller arranges transport and delivers the goods to Hyderabad. After much deliberation, the seller and buyer agree on the CPT Incoterm.
The operation process under CPT Incoterm 2020:
The seller begins manufacturing the goods and shares with the buyer the date of loading. They will simultaneously book containers.
The seller will package the finished goods once they are ready. The seller can call the inspection agency to inspect the goods before shipment. After obtaining satisfactory results, representatives from the inspection agency will visit the seller’s place and inspect the goods. In the event of a dispute, they will issue an inspection certificate to the seller.
COC (Certificate of Conformity)
They will give the COC certificate directly to the buyer.
Contact a freight forwarder or liner for containers. The seller will arrange the loading of packed goods into containers. After arriving at Taichung port, customs clearance will take place by the seller’s clearing agent. After the arrival of the containers at port, the seller will hand over the containers to the carrier. The buyer will then be informed that the seller has ended all responsibility.
After all port operations are completed, the vessel will be on board. Once the vessel is onboard, the sellers will contact various offices.
Post shipment documents
Once the documents have been arranged, the seller will send scanned copies to the buyer via email. The documents will then be lodged at their bank.
CAD payment period
Documents:
- commercial invoice
- Packing list
- A Bill of Lading
- Certificate of origin.
- Pre inspection certificate
- If you need other documents,
The buyer can purchase insurance for cargo by contacting the insurance agency. After the documents arrive at the buyer’s bank, the buyer will pay the invoice amount and then take the documents.
The final destination is Hyderabad, India. However, a sea port is not available in Hyderabad. In this instance, a vessel will transport the containers to the nearest seaport to Hyderabad. From there, containers can be loaded onto trailers or railcars and transported to Hyderabad. Chennai is the closest port to Hyderabad.
Containers will be unloaded at Chennai port in India after they arrive. The containers will then be loaded into vehicles or railcars and taken to Hyderabad ICD. Unloading cargo in CPT can be negotiated between the buyer and seller. In this instance, we assume that unloading is within the buyer’s control. The buyer will pay the import customs clearance fees and all other charges such as THC, clearance charges, custom duties, etc. The cargo will be delivered to the buyer’s place.
This is the process for a shipment that falls under CPT Incoterm 2020.
All this is about CPT incoterm and we hope the above article would have helped you to understand what is CPT shipping and the operation mode. If you have any consultations required for air freight, ocean freight, customs clearance, and Logistics transportation then we have a very committed team of professionals to help you out. You can get in touch with us at Consolidation Shipping Line any time of the day or drop an email at inquiry@cslindia.net