CPT vs CIP: which Incoterm should you use?
CPT (Carriage Paid To) versus CIP (Carriage and Insurance Paid To) — who pays freight, where risk transfers, and what each choice does to your landed cost. Last reviewed 16 July 2026.
CPT and CIP both have the seller pay carriage for any transport mode; only CIP adds insurance — and under Incoterms 2020 it must be maximum all-risks cover.
CPT vs CIP at a glance
| Factor | CPT — Carriage Paid To | CIP — Carriage and Insurance Paid To |
|---|---|---|
| Group | C — Main carriage paid | C — Main carriage paid |
| Transport mode | Any mode | Any mode |
| Who pays main freight | Seller | Seller |
| Insurance obligation | No obligation on either party | Seller must insure — maximum cover (Institute Cargo Clauses A) under Incoterms 2020 |
| Risk transfers | When goods are handed to the first carrier — before the seller-paid carriage | When goods are handed to the first carrier — before the seller-paid carriage |
| Export clearance | Seller | Seller |
| Import clearance | Buyer | Buyer |
| Best for | Containerised or multimodal cargo where the seller pays carriage but the buyer insures | Multimodal cargo where the buyer wants carriage plus all-risks insurance bundled in |
Based on the Incoterms 2020 rules (ICC). Always confirm the exact obligations in your sales contract — as of 16 July 2026.
When to choose CPT
Choose CPT when you want the seller to book and pay carriage to a named destination but you would rather arrange insurance yourself — often because you hold a better annual marine or all-risks policy. CPT is the uninsured any-mode C-term: seller pays freight, buyer handles cargo cover.
When to choose CIP
Choose CIP when you want carriage plus comprehensive insurance bundled into the seller's quote. Under Incoterms 2020 CIP obliges the seller to insure at the maximum level (Institute Cargo Clauses A), so you get all-risks protection to the destination without arranging your own policy — ideal for high-value multimodal cargo.
What it does to your landed cost
The difference is the insurance premium and its breadth: CIP costs more but delivers all-risks cover, while CPT leaves you to insure separately. The seller-paid carriage feeds the customs value your duty and import VAT are charged on under both, and a higher insured value under CIP can lift that dutiable base. Weigh the premium against buying your own cover, then run both through the calculator to see the per-unit landed cost.
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