Keep the delivery point and paid destination separate
Under CPT and CIP, risk normally transfers when goods are handed to the carrier, although the seller pays carriage to the named destination. CIP adds an insurance obligation. DAP keeps risk with the seller to the named destination, ready for unloading.
For CPT or CIP, identify both the agreed carrier handover point and the paid destination. For DAP, describe the destination delivery point precisely. Include Incoterms® 2020 in the sales contract and check that transport instructions use matching locations.
Review insurance and the actual transport scope
CIP includes seller-arranged insurance under the rule; CPT and DAP do not impose the same obligation. The existence of insurance still leaves practical questions about the insured goods, route, value and exclusions. Request the evidence before shipment and review it with the party arranging cover.
- Name the point at which cargo is handed to the first carrier and identify who records that event.
- Specify which terminal, warehouse or address is the paid destination.
- Confirm the importer, customs representative and import charges; these are generally buyer responsibilities under these three rules.
- Agree unloading and receiving arrangements, including any appointment or access requirements.
- Ask how a missed connection, customs hold or delivery change will be communicated and costed.
When comparing freight quotes, use the same collection address, cargo figures and endpoint. A terminal-based service and an inland warehouse delivery are different scopes even if both quotations use the same three-letter rule.
Questions for a multimodal shipment
Does “carriage paid to” mean the seller carries risk until arrival?
Not under CPT or CIP. Confirm the agreed carrier handover point where risk transfers and review the contract for any agreed variation.
Does CIP replace the need to read the insurance policy?
No. Review the policy and evidence, including the covered journey and exclusions, so the cover matches your shipment requirements.
Which rule is best for my purchase?
Choose after checking control of transport, acceptable risk, insurance and destination import capability. The lowest quoted freight price is insufficient to decide the sales term.
Compare DDP and DAP or discuss international freight options using the actual delivery points.
Reference: ICC Incoterms® 2020 checklist. Check the current official requirements for your shipment.