FOB and CPT under Inco terms 2020 (2024)

FAQs

What is FOB and CPT Incoterms? ›

What is the difference between CPT and FOB? The risk is transferred to the importer once the goods are loaded at the origin point under CPT. However, in the case of FOB, the exporter bears risk of any damage to the goods during transit.

Free On Board Transportation Options

Under Incoterms 2020, FOB should only be used for sea and inland waterway transport.

Under the Incoterms 2020 rules, CPT means the seller is responsible for clearing the goods for export and delivering them to the first carrier or another person stipulated by the seller at a named place of shipment (usually a foreign freight terminal) at which point risk transfers to the buyer.

Named Place Requirement: Place of Destination

Carriage Paid To (CPT) rules require the seller to clear the goods and arrange carriage (by one or more transport modes) to the named place of destination. The seller does not need to obtain or pay for insurance.

If any expenses are incurred, it is the buyer's responsibility to cover these charges. Import Duty, Taxes & Customs Clearance: The buyer shall pay all import fees. This includes customs examinations, dunnage, penalties, or holding charges.

The Current Procedural Terminology (CPT®) codes offer doctors and health care professionals a uniform language for coding medical services and procedures to streamline reporting, increase accuracy and efficiency.

Traditionally with FOB shipping point, the seller pays the transportation cost and fees until the cargo is delivered to the port of origin. Once on the ship, the buyer is responsible financially for transportation costs, customs clearance, fees, and taxes.

With the FOB shipping point option, the seller assumes the transport costs and fees until the goods reach the port of origin. Once the goods are on the ship, the buyer is financially responsible for all transport costs, customs, taxes, and other fees.

FOB, or Free On Board, is an Incoterm that stipulates the seller is responsible for delivering the goods on board a vessel designated by the buyer. This responsibility includes all costs and risks up to the point of loading the goods onto the ship.

EXW – Ex Works (showing the place of delivery) FCA – Free Carrier (showing the place of delivery) CPT – Carriage Paid to (showing destination)

Is CPT origin or destination? ›

In shipping terms, Carriage Paid To (CPT) means that the seller or exporter is responsible for paying any costs associated with transporting the goods from their point of origin to their named place of destination. These costs include any export fees required by Customs authorities in the country of origin.

Under CPT, the buyer must pay: unloading costs (unless they were paid by the seller under the contract of carriage), any costs of the country of transit (unless they have been paid by the seller under the contract of carriage), any duties, taxes, and other costs for import clearance, where applicable, and.

CPT modes are used widely used for the shipments by air also. Under FOB, the destination named place is at seller's side where under CPT terms, the destination named place is at buyer's side. Costs against main carriage is paid by seller under CPT where under FOB, the main carriage cost is under buyer's responsibility.

FOB shipping: who is responsible for what? Under Free on Board, the seller is responsible for delivering the goods to the port of departure, clearing it for export, and loading the goods on the vessel.

Carriage Paid To (CPT) is an international trade term that means the seller delivers the goods at their expense to a carrier or another person nominated by the seller. The seller assumes all risks, including loss, until the goods are in the care of the nominated party.

When goods are bought or sold “Free on Board” (FOB) it means that the seller delivers the goods to a ship at a port previously agreed to by the seller and the buyer. The seller loads the goods onto the ship. The buyer then takes care of the import formalities and transportation to the final destination.

FOB is a shipping term that stands for “free on board.” If a shipment is designated FOB (the seller's location), then as soon as the shipment of goods leaves the seller's warehouse, the seller records the sale as complete.