CPT and CIP

What does CPT (Carriage Paid To) mean?

Under this agreement, the seller organizes and pays for the delivery of the goods to a pre-agreed destination, but responsibility for safety passes to the buyer at the moment the cargo is handed over to the first carrier.

That is:
-seller pays for international shipping;
-registers exports;
-transfers cargo for transportation;
-after the cargo is transferred, the risks pass to the buyer;
-the buyer is responsible for import clearance and further delivery.

Thus, these conditions are suitable for cargo with a low level of risk or when the buyer is ready to independently control the further movement of the goods after their transfer to the carrier.

What does CIP (Carriage and Insurance Paid To) mean?

Simply put, this is an extended version of CPT: the seller fulfills all the same obligations, but additionally takes out an insurance policy for the cargo in favor of the buyer.

This means that:
-transportation to the destination is paid by the seller;
- preparation of export documents – also on the seller's side;
-when the cargo is transferred to transport for delivery, the risks formally pass to the buyer;
-but the goods are insured for at least 110% of the value - this protects the buyer from financial losses even in the carrier's area of ​​responsibility.

Therefore, this type of contract is beneficial for valuable, fragile or technological goods, as well as for multimodal routes with a change in modes of transport.

CPT and CIP: obligations of the parties

Seller's responsibilities:

-preparation of shipment: packaging, labeling, necessary documents;
- completion of export formalities and procedures;
-conclusion of a freight contract;
-payment of freight to the point specified in the contract;
-transfer of cargo to the first carrier;
-additionally for CIP – insurance coverage for the entire route.

Buyer's responsibilities:
cargo acceptance at a pre-agreed destination;
risks for the safety of the goods after their transfer to the transportation partner;
import customs procedures and payment of related duties and taxes;
organization of delivery to the final warehouse, office, etc.;
if necessary, extended insurance beyond the standard.

Main functions

Due to the similarity of the underlying logic, these things are extremely controversial, equal to the protection of the vanity and obligations of the seller:

For the CPT, the seller pays for transportation to the designated point of destination and for organizing export clearance, but insurance is not included until the end of the transaction, since as soon as the goods are transferred to the first carrier, the responsibility for savings goes to the buyer, who, if necessary, independently takes out insurance or takes all possible risks on himself;

In the CIP option, the seller will additionally provide liability insurance up to the point of acceptance, and the insurance coverage must cover the benefits (usually no less than 110% of the value of the goods), formally here the risks also pass to the buyer at the time of transfer The carrier, and for insurance purposes, the buyer must report thefts from financial expenses at these stages, which are within the zone of his control.

Advantages of such delivery in partnership with Mitridat

Our company has been operating on international routes for many years, with offices in Odessa, Chisinau, Constanta, New Jersey, Almaty, Guangzhou and Incheon. This allows us to control transportation at every stage – from export clearance to container delivery to the recipient’s warehouse.

Our specialists provide:

-selection of the optimal route;
-organization of sea, road, rail or combined transportation;
-preparation of all documentation;
- processing of export procedures;
- cargo insurance when working under CIP;
-support and information to the client;
-assistance with import clearance (if necessary).

Thanks to its wide geography and developed partner network, Mitridat is able to build effective international routes with minimal delays and optimal freight rates.

Our clients receive:

-transparency of conditions – you always know and understand what needs to be paid and who is responsible for each stage;
- reliable network of representative offices – control in key logistics hubs in Europe, Asia, and the USA
-flexibility – we adapt to the route, timing and specifics of the product;
-24/7 support – our managers are always in touch during the transportation process;
international logistics experience and professionalism – we optimize costs and deadlines.

Therefore, in general, the terms CPT and CIP are convenient and understandable tools of international logistics, allowing to accurately distribute responsibilities between the seller and the buyer. Due to the wide network of representative offices and experience of Mitridat international transportation, you will receive the most reliable and transparent delivery process. We recommend CPT to those who want to optimize costs, and CIP - for those clients who choose security and extended insurance.