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CPT vs CFR : How are They Different? | An Importer’s Guide 2020

CPT vs CFR : How are They Different? | An Importer’s Guide 2020

When importing from China anywhere in the world you can come across various terminologies. Selecting your shipping method from China will give you terms like CPT or CFR. What are those words and how are they different? In this post of ddpch, we will discuss CPT vs CFR.

What is Carriage Paid To (CPT)?

CPT stands for Carriage Paid To. CPT is an international trade term meaning the seller must supply the goods to a carrier or another individual chosen by the seller at their (the seller’s) expense. The vendor bears all risks, including failure, before the products are in the appointed party’s care. The carrier can be the person or entity responsible for the carriage of the goods (by sea, rail, road, etc.) or the person or entity appointed to procure the carriage’s output. In their freight rates, the CPT price can include Terminal Handling Charges (THC).

Further Reading: What is a Material Safety Data Sheet (MSDS) | Why is it Needed for International Shipping 2020?

What Is Cost and Freight (CFR)?

Now that we read about CPT, before moving on to CPT vs CFR, let us talk about CFR. Cost and freight (CFR) is a legal term used on contracts for international trade. In a contract stating that a sale is a cost and freight, the seller is expected to arrange for the transport of goods by sea to a port of destination. And also to supply the buyer with the requisite paperwork to receive them from the carrier. The seller is not liable for the acquisition of marine insurance against the possibility of loss or harm to the cargo during transit. Price and freight is a term used specifically for goods transported by sea or inland waterways.

CPT vs CFR: The Difference

With enough knowledge of both terms, now we can move on to talking about CPT vs CFR: The Difference.

  • Carriage Paid To (CPT) is an International Commercial Concept that denotes the seller as incurring the risks and costs associated with transporting goods to a carrier to a destination agreed upon. 
  • In the case of multiple carriers, the risks and expenses pass to the customer upon delivery to the first carrier.
  • CPT expenses include taxation and export duties. 
  • The buyer may opt for the Carriage and Insurance Paid To (CIP) agreement as an alternative, whereby the vendor also insures the goods during transit.

Further Reading: DPU vs DDP : What’s the Difference? | Importer’s Guide

  • Cost and freight is a legal term used in international trade contracts. This term specifies that the seller of the goods is required to arrange for the shipment of goods. This shipping is by sea to a port of destination. The seller also has to provide the buyer with the necessary documentation to receive the goods from the carrier.
  • If a buyer and a seller agree to include costs and freight in their deal, this agreement ensures that the seller is not liable for providing insurance of loss or injury for the load during shipment.
  • Cost and freight are a widely used International Commercial Term, and a collection of globally-recognized terms. These terms help establish a standard for foreign trade contracts. Plus, they are published and updated regularly by the International Chamber of Commerce (ICC).
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