C · 4
Carriage and Insurance Paid To CIP
A term for any mode of transport that adds, to CPT, transit insurance bought by the seller in the buyer’s favour. Incoterms 2020 raised the minimum cover under CIP to Institute Cargo Clauses (A) – “all risks” – whereas CIF stays at (C); the insured amount is 110 % of the contract value. Risk passes when the goods are handed to the first carrier.
Carriage Paid To CPT
The multimodal counterpart of CFR, usable with any mode of transport. The seller contracts and pays carriage to the named destination, but risk passes to the buyer as soon as the goods are handed to the first carrier. Because the point where costs transfer differs from the point where risk transfers, the buyer should insure the transit. Common for road, rail, air and container shipments.
Cost and Freight CFR
Used only for sea and inland-waterway transport. The seller loads the goods on board at the port of shipment and pays freight to the named destination port, but risk passes to the buyer when the goods are on board at loading, exactly as under FOB. The buyer therefore carries the transit risk and should arrange its own cargo insurance. Prices are quoted with the destination port, e.g. “CFR Iskenderun”.
Cost, Insurance and Freight CIF
A sea-transport term that adds, to CFR, cargo insurance taken out by the seller in the buyer’s favour. Under Incoterms 2020 the minimum cover for CIF is Institute Cargo Clauses (C) for 110 % of the contract value; if broader “all risks” (A) cover is wanted it must be written into the contract. Risk still passes when the goods are loaded on board at the port of shipment, so the seller pays freight and insurance but does not carry the voyage risk.