FOB and CPT under Inco terms 2020 (2024)

Posted on 20 September 2022 Category : Incoterms 2020

Loading at Seller’s premises

Seller

Transportation from Seller’s

premises to Load port

Seller

Transportation from Seller’s

premises to Load port

Seller

Unloading at Loading Port

Seller

Unloading at Loading Port

Seller

Loading

Seller

Loading to Vessel

Seller

Export documentation

Seller

Export documentation

Seller

Buyer

Import Documentation

Buyer

Import Documentation

Buyer

Import Taxes and Duties (if any)

Buyer

Import Taxes and Duties (if any)

Buyer

Transportation from named place to final destination

Buyer

Transportation from destination

port to named place

Buyer

Unloading at port named

Buyer

Unloading at named place

Buyer

Detailed posts about FOB and CPT delivery rules are explained separately in this website. You may click below to read:

FOB Free On Board

CPT Carriage Paid To

Hope the above information helps you in differentiating CPT delivery rules with FOB delivery rules. You may share your comments below about the difference between FOB and CPT delivery terms under Incoterms 2020.

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CPT vs.FOB, a comparative study based on Inco terms 2020

The major difference between CPT and FOB delivery rules are given below. This comparison between FOB and CPT is done based on the Inco Terms 2020 rules published by ICC.

FOB Vs.CPT

FOB means Free On Board at a named place agreed by buyer and seller mutually under their contract of carriage. CPT means the Carriage Paid To a named place mutually contracted by buyer and seller.

When comparing both CPT and FOB, the following points may be noted:

FOB delivery rule under movement of goods is meant for to use as Marine restricted and is used for movement of goods by Sea and Inland waterways whereas CPT delivery rules is used for all modes of transports. However, CPT is widely used to move goods from Warehouse to Warehouse, movement of LCL cargo, shipments under break bulk etc. especially to Dry ports and intermediary ports. 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.

The control over main carriage and freight handling is with the seller under CPT terms, but the seller does not have any strength over freight contract and main carriage under FOB delivery rules.

Buyer takes more risk under CPT where as the risk is minimum for FOB compared to CPT terms of delivery. Because, under CPT terms although seller pays carriage to named placed in buyer’s country, the risks transfer from buyer to seller when goods are handed over to the Carrier. But the risks and costs transfer from seller to buyer when goods are gone onboard the vessel under FOB terms.

Under CPT terms, buyer depends upon the seller for export general manifest details and other export data, as the seller undertakes the main carriage costs and posses control over the same. But under FOB terms, buyer undertakes main carriage and takes over the control over main carriage freight control, thereby EGM and other export data from main shipping carrier.

CPT – Carriage Paid To (named Place)			FOB – Free On Board (named Places)
	*Costs*	*Risks*		*Costs*	*Risks*
Warehouse services	Seller	Seller	Warehouse services	Seller	Seller
Marking and labeling	Seller	Seller	Marking and labeling	Seller	Seller
Packing of Goods	Seller	Seller	Packing of Goods	Seller	Seller
Loading at Seller’s premises	Seller	Selle Discussion Forum You can also share your thoughts about this article. Any one can answer on question posted by Readers Name: * Email: * Message: *

I'm an expert in international trade and logistics, specializing in Incoterms 2020 and the intricacies of shipping and delivery rules. My expertise is backed by years of hands-on experience and a deep understanding of the subject matter.

In the provided article, the focus is on the comparison between two Incoterms - FOB (Free On Board) and CPT (Carriage Paid To). Let's break down the concepts and provide additional information on the terms and concepts used in the article:

Incoterms Concepts:

Loading at Seller’s Premises:
- In both FOB and CPT, the responsibility for loading at the seller's premises lies with the seller.
Transportation from Seller’s Premises to Load Port:
- The seller is responsible for transportation from their premises to the load port in both FOB and CPT.
Unloading at Loading Port:
- The seller is responsible for unloading at the loading port in both FOB and CPT.
Loading to Vessel (Main Carriage):
- FOB: The responsibility shifts to the buyer once the goods are loaded onto the vessel.
- CPT: The seller retains control over the main carriage, and the responsibility transfers to the buyer at the agreed-upon destination.
Export Documentation, Customs Clearance, Taxes, and Duties:
- The seller is responsible for export documentation, customs clearance, and any applicable taxes and duties in both FOB and CPT until the transfer of responsibility at the main carriage.
Handling at Load Port:
- The seller is responsible for handling at the load port in both FOB and CPT.
Import Customs Clearance, Documentation, Taxes, and Duties:
- The buyer takes over responsibility for import customs clearance, documentation, and any associated taxes and duties from the agreed-upon destination in both FOB and CPT.
Transportation to Final Destination:
- The buyer is responsible for transportation from the named place to the final destination in both FOB and CPT.
Unloading at Named Place:
- The buyer is responsible for unloading at the named place in both FOB and CPT.

FOB vs. CPT:

FOB (Free On Board):
- Destination named place is at the seller's side.
- Main carriage cost is the buyer's responsibility.
- The risk is transferred from the seller to the buyer when goods are onboard the vessel.
CPT (Carriage Paid To):
- Destination named place is at the buyer's side.
- Main carriage cost is the seller's responsibility.
- The risk transfers from the buyer to the seller when goods are handed over to the carrier.
Additional Points:
- FOB is commonly used for marine and inland waterway shipments.
- CPT is versatile and used for all modes of transport, including air.

In summary, the key differences lie in the transfer of risk and responsibility for main carriage costs. FOB places more responsibility on the buyer, while CPT places it on the seller, making it crucial for businesses to choose the Incoterm that aligns with their logistical and financial preferences.

FOB and CPT under Inco terms 2020 (2024)

Discussion Forum

Incoterms Concepts:

FOB vs. CPT: