CPT vs CIP – who pays for what?
CPT is Carriage Paid To and CIP is Carriage and Insurance Paid To. We compare who pays for transport, customs clearance and duty, and where risk passes to the buyer.
Key differences
Under CIP, the seller also covers insurance. Under CPT, insurance is not compulsory. Under both rules, risk passes to the buyer on handover to the carrier in the country of dispatch.
- Insurance
- CPTNo obligationCIPSeller
Full cost breakdown
| Cost | CPT | CIP |
|---|---|---|
| Export clearance | Seller | Seller |
| Transport to the port or terminal | Seller | Seller |
| Loading for main carriage | Seller | Seller |
| Main carriage (freight) | Seller | Seller |
| Insurance | No obligation | Seller |
| Unloading at destination | Buyer | Buyer |
| Import clearance | Buyer | Buyer |
| Import duty and VAT | Buyer | Buyer |
| Risk passes | When the seller hands the goods over to the first carrier – even though the seller pays for transport to the place of destination. | When the seller hands the goods over to the first carrier – even though the seller pays for transport and insurance. |
| Mode of transport | Any mode of transport (sea, rail, air, road) | Any mode of transport (sea, rail, air, road) |
Notes
- 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
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.
CIP Carriage and Insurance Paid To
In Incoterms 2020, CIP requires broader insurance than CIF: Institute Cargo Clauses (A) – “all risks” – at 110% of the value of the goods. Even so, the risk passes to you in China, when the goods are handed over to the carrier. The policy protects you, but the supplier takes it out – ask for a copy before shipment.
More about CIP →When to use CPT and when to use CIP?
- 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.
- CIP – for any mode of transport, when the supplier arranges carriage and broad insurance cover (Clauses (A)), while you handle customs clearance in Poland.
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 CPT and CIP?
Under CIP, the seller also covers insurance. Under CPT, insurance is not compulsory. Under both rules, risk passes to the buyer on handover to the carrier in the country of dispatch.
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.
Where does risk pass to the buyer under CIP?
When the seller hands the goods over to the first carrier – even though the seller pays for transport and insurance.
Can CPT and CIP be used for rail freight from China?
Yes. CPT and CIP can be used with any mode of transport: sea (including containers), rail, air and road.
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.