CIF vs CPT – who pays for what?
CIF is Cost, Insurance and Freight and CPT is Carriage Paid To. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIF, the seller also covers insurance. Under CPT, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF applies only to sea and inland waterway transport.
- Insurance
- CIFSellerCPTNo obligation
- Risk passes
- CIFOn board the vessel at the port of loadingCPTOn handover to the carrier in the country of dispatch
- Mode of transport
- CIFSea onlyCPTAny
Full cost breakdown
| Cost | CIF | CPT |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Seller | Seller |
| Main carriage (freight) | Seller | Seller |
| Insurance | Seller | No obligation |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance. | When the seller hands the goods over to the first carrier – even though the seller pays for transport to the place of destination. |
| Mode of transport | Sea and inland waterway transport only | Any mode of transport (sea, rail, air, road) |
Notes
- CFR and CIF – the main freight ends at the port of destination. Transport from the port to the warehouse is paid by the buyer, while under the D rules (DAP, DPU, DDP) this leg is the seller’s responsibility if the place of delivery is a warehouse.
- Unloading at destination: if unloading costs are included in the contract of carriage concluded by the seller, the seller pays them and cannot charge them to the buyer afterwards.
- Insurance: only the seller is obliged to insure, and only under CIF (at least Institute Cargo Clauses (C), 110% of the value) and CIP (Institute Cargo Clauses (A), 110% of the value). Under the other rules, nobody has to insure the goods – but once risk has passed, any loss is borne by the buyer.
What to watch for when importing from China
CIF Cost, Insurance and Freight
CIF works like CFR, but the supplier also insures the goods – though only with minimum cover (Institute Cargo Clauses (C), 110% of the value of the goods), unless you agree on broader cover. The policy is usually issued by a Chinese insurer, so you would have to pursue any claim abroad. Check the scope of the policy or insure the goods in Poland.
More about CIF →CPT Carriage Paid To
The supplier pays for transport to the place of destination, but the risk passes to you when the goods are handed over to the first carrier in China. If the goods are lost or damaged in transit, it is you who has to pursue the claim – so it is worth insuring them.
When to use CIF and when to use CPT?
- CIF – for sea freight, when the supplier arranges freight and insurance, and the policy’s minimum cover is enough for you – or you will arrange broader cover.
- CPT – for any mode of transport (including rail and air), when the supplier arranges carriage to Poland, while you insure the goods and handle customs clearance.
Has your supplier quoted a price including transport?
Compare it with our offer for transport from China – by rail, sea or air – with customs clearance in Poland and cargo insurance. Send us your cargo details and we will prepare a quote tailored to your shipment.
Request a quoteFAQ
What is the main difference between CIF and CPT?
Under CIF, the seller also covers insurance. Under CPT, insurance is not compulsory. The two rules also differ in the point at which risk passes to the buyer and in the mode of transport. CIF applies only to sea and inland waterway transport.
Where does risk pass to the buyer under CIF?
At the port of loading, when the goods are on board the vessel – even though the seller pays for freight and insurance.
Where does risk pass to the buyer under CPT?
When the seller hands the goods over to the first carrier – even though the seller pays for transport to the place of destination.
Can CIF and CPT be used for rail freight from China?
Only CPT. CPT works with any mode of transport, while CIF applies only to sea and inland waterway transport. That is why CIF is not used for rail freight from China.
Compare other pairs
Incoterms® is a registered trademark of the International Chamber of Commerce (ICC). This page is an independent, simplified summary of how costs and risks are divided – it is not affiliated with or approved by the ICC. When drafting contracts, use the official text of the Incoterms® 2020 rules published by the ICC.