CPT delivery method is the name given to the system where the seller directly collects customs duties for products transported by sea. It occurs during shopping from overseas countries. CPT is one of the sea transportation terms and is used in tax applications. It is expressed as ‘Carriage Paid To’. Its Turkish equivalent can be translated as “Delivered Paid”. In the CPT delivery type, the seller is responsible for paying all customs and freight charges until the buyer receives the goods in overseas trade.
What is CPT Delivery Method?
What is CPT? In this delivery type, the seller company prepares the products, selects and contracts with the carrier, handles customs procedures related to export, and delivers the goods with the transportation contract and transportation costs paid, saving the buyer time and effort by taking on these steps. The seller assumes responsibility for damages and costs, and obtains all necessary export permits, documents, and other official permissions for the export of the goods. By handling the related procedures, the seller takes on most of the responsibility. It completes the customs procedures necessary for the export of the goods. These procedures create obligations for both the buyer and the seller.
The CPT delivery method, where all transportation costs are paid along with the goods and insurance and other expenses are collected by the importer at the same time, is specifically preferred in multi-modal transportation. The party performing CPT delivery prepares the goods, handles customs procedures, ensures the goods are loaded onto the main transportation vehicle, and pays the transportation fee for this main vehicle. Thus, the seller's responsibility ends once the goods are loaded onto the main transportation vehicle.
The CPT delivery method needs to be examined from both parties' perspectives. The responsibility of the buyer begins once they receive the products from the transportation vehicle in this CPT delivery. Therefore, in CPT type delivery, although the collection of transportation, customs, and other expenses is the seller’s responsibility, all risks and costs after delivery are borne by the buyer.
In logistics processes, the use of the CPT delivery method is especially preferred in transportation types involving multiple carriers. The seller completes all responsibilities related to the load once it is delivered to the first carrier. From this point on, the buyer assumes all risks related to the load and all costs that may arise after delivery. The CPT delivery method should be examined from both sides.
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Seller's Responsibilities
The seller has certain obligations regarding the delivery of the load. The exporting party prepares the load according to the contract. It obtains information about the country where the delivery will be made and prepares all required documents, covering customs expenses and freight charges. After fulfilling all these conditions, the seller is exempt from any other expenses or risks that may arise from the moment they deliver the goods to the first carrier. The importer, in short, informs the buyer of the date they will transport the goods and the estimated arrival date. It is important to note and analyze that the seller is responsible for paying all inspection costs in the country where the loads will arrive (such as counting, measuring, quality control, etc.) and the pre-shipment inspection costs requested by relevant institutions and organizations in the country where the export will be made.
Buyer's Responsibilities
The buyer, in short, the party performing the import, pays the agreed fee to the seller as per the contract. It arranges customs documents necessary for the continuation of the import process and collects customs duties. The responsibility for the load begins when the seller delivers the load to the first carrier. From this point on, all obligations, risks, and potential costs related to the load transfer to the buyer. If the contract does not include unloading costs in the freight fee, the buyer pays the unloading fee and then receives the through bill of lading from the agent. The buyer is responsible for paying other pre-shipment inspection costs, excluding the costs of loading, which may arise according to the procedures of the export country, and other pre-shipment inspection costs requested by relevant organizations in the country where the export will be made.
Features of the Cpt Delivery Method
The rule “Carriage Paid” indicates that the exporter will deliver the products to a carrier or another person they specify at a designated place (or if no such place is specified by the parties, at a designated location), and that the exporter is obliged to make the transportation agreement necessary for the delivery of the goods to the specified delivery place and to pay the transportation costs.
When the CPT rule is used, the seller fulfills their delivery responsibility not when the goods reach the delivery point, but when they entrust the goods to the carrier according to the relevant rule.
Features of the CPT delivery method are also used in multi-modal transportation types. The seller is obliged to pay the freight costs up to the delivery point. From the moment they transfer the goods to the first carrier, all risks and costs other than freight related to the load pass to the buyer, i.e., the importer.
Why Should the Cpt Delivery Method Be Preferred?
This delivery method, which contains certain advantages and disadvantages for both the buyer and the seller, is increasingly preferred day by day. The necessary procedures vary from country to country, which negatively affects companies in terms of time and energy. Some of these procedures are undertaken by the seller up to a certain point, and others by the buyer. In this regard, the CPT delivery method differs from other delivery types in its features. The most notable and primary reasons for its preference are the savings in time and energy, which are the two main issues.
How Does the Process Work in Cpt Delivery?
First, the seller prepares the goods in accordance with the contract terms. It prepares the necessary documents for the buyer’s country. Completes customs procedures. Signs a contract with the transportation agency and pays the freight costs up to the port of delivery. From the moment they transfer the goods to the first carrier, they are freed from all efforts and expenses related to loading. They notify the buyer of the delivery and the possible arrival date. The seller must pay the costs related to inspection procedures necessary for the delivery of the goods and the pre-shipment inspection costs mandated by the export country authorities. The goods then reach the buyer, i.e., the importing party, after the aforementioned procedures. The buyer pays the price of the goods according to the contract terms. Prepares customs documents for import and completes customs procedures. Collects customs duties. From the moment the goods are delivered to the first carrier, all efforts and expenses related to loading, other than freight, are the responsibility of the buyer. The buyer also bears the customs expenses that may arise due to transit transportation. If not included in the freight fee, they pay the unloading fee and receive the bill of lading with a draft from the agent. The buyer must also pay other pre-shipment inspection costs, excluding the costs of loading, which are required by the authorities of the export country.
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