Logistics in recent years began to develop en masse. This is facilitated by some growth in the development of regions, and therefore the importance of freight transportation in the country has increased. Of course, the number of entrepreneurs who would like to do this has also increased significantly.
The beginning of such activity is largely complicated by the fact that newly-minted freight carriers often do not imagine the nuances, many of which are very important. For example, CPT terms of delivery. In the world they are used extremely widely, so knowing about all their features is very important.
Definition of a concept
In world practice , CPT delivery terms mean that the seller is obligated to deliver the goods to the buyer who paid for the purchase, but not the carriage. This is a key feature of this type of transportation: the seller assumes all obligations regarding the cost of the service. The buyer, in turn, fully agrees with all the risks.
In this particular case, “carrier” means any natural or legal person who can carry out (under the terms of the contract) the delivery of goods by road, air, sea or other means of transport specified in the documents. If the terms of delivery of the CPT provide for the shipment of goods with the participation of several suppliers, all risks pass from one of them to another at the moment when the goods were transferred from one mode of transport to another.
All customs operations are also the responsibility of the seller. Please note that the term CPT can be used in relation to any existing mode of transport.
Other nuances
In foreign literature, the term Carriage paid to is used, which means exactly the same thing we just wrote about. In addition, the terms of delivery of the CPT suggest that if the parties agree to use the services of a third-party carrier, all responsibility also lies with the supplier at the time of transfer of the goods to him. The seller’s responsibility in this case does not extend until the delivery of the goods to the point specified in the documents.
Thus, the terms of delivery of CPT is an example of such logistic transportation, in which the seller almost completely lays the responsibility. That is why the supplier should be extremely careful when drafting or reading the contract of sale.
Critical points
Given that there is a minimum of two-time transfer of goods, any typical delivery has two critical points. Important! It is strongly recommended that sellers and buyers (as well as logistics companies, if any) distinguish all delivery terms as clearly as possible, including step-by-step transfer of responsibility when loading or unloading goods.
If several carriers are used at once, and the parties were unable to determine the exact destination, the first carrier on the list must take into account the fact that, using the imperfection of our laws, all subsequent carriers may blame for non-compliance in the documents or damage to the cargo. Therefore, all these points should be specified in advance in the documents of sale or contract for transportation, otherwise later it will be necessary to prove for a long time that you are right in court.
Have such cases already occurred when it comes to CPT shipments? Moscow, the delivery conditions in which were always distinguished by confusion, probably remembers the numerous scandals associated with the development of promising areas. Often, suppliers of building materials were not only without money, but also were forced to sue for a long time, proving the fault of other carriers in the loss of material.
Destination Definition
Thus, in the final contract it is recommended to determine as precisely as possible the destination to which the responsibility for the transported goods will lie with the logistics company (or the seller himself, subject to self-transportation). It is the seller who must ensure the availability of appropriate supply contracts. Note! According to the CPT DAP rules , the delivery conditions do not provide for reimbursement to the seller of the costs of unloading the goods, unless otherwise provided by agreement of the parties, which is reflected in the documents drawn up.
Once again, we note that the seller will also be required to comply with all customs formalities if the conditions of carriage require passage through the state or internal border. But! In no case is he obligated to bear the costs and carry out formalities when importing goods, pay customs duties or other services.
Having finished consideration of the general points, it is necessary to discuss more specific nuances of deliveries which are directly connected with the seller.
Presence and other conditions
So, in any case, the supplier is obliged to provide the goods to the buyer for review, to transfer the invoice, as well as other documents that may be needed to determine the quality or other characteristics of the goods. If this is a normal procedure or pre-approved in the contract, an electronic signature may be used.
Licenses, other controls
If this is required, the seller should, at his own risk and risk, obtain all export permits (and pay for them), as well as other official documents, comply with all customs regulations and other formalities adopted in case of transportation of a particular type of cargo.
About the contract of carriage and insurance
The seller is obligated to conclude a contract for the delivery of goods to a specific destination, if it is defined, or to some specific place in it. This document should also provide for transportation under normal conditions and in a standard way, so that the seller could not knowingly overstate the cost of his services. If the destination has not been agreed upon or was not discussed in the contract, the seller can choose it independently, in full accordance with where it is more convenient for him to deliver the goods.
As for the cargo insurance contract, in this regard the seller has no obligations whatsoever. But! He is obliged upon request to provide all the information that is necessary to obtain insurance to the buyer.
About the distribution of expenses
The seller must pay all expenses until the goods arrive at the destination, except for the cases that we already wrote about above. In addition, his duties include payment of freight, as well as costs associated with loading and unloading goods (see above). Of course, if other circumstances are not specified in advance and are not spelled out in the documents, and the delivery on the terms of CPT takes place as usual, without force majeure situations.
Once again, we remind you that all expenses associated with the clearance of goods at the border, as well as other similar formalities, the seller pays only if it is specified in the contract. In all other cases, he does not bear such obligations.
Inspection and packaging of cargo
The costs associated with labeling, weighing and checking the goods are borne entirely by the seller. In addition, all costs associated with the packaging and packaging of goods are borne by him , with the exception of cases when the industry allows the transportation of a specific type of cargo in bulk. However, even in this case, the marking of the goods in the accompanying documents must be carried out with strict observance of all the rules.
Buyer Responsibilities
Let's talk now about what are the responsibilities for the buyer on the CPT. Delivery conditions (2010 and later) in this case provide only for timely payment for the goods. If the contract does not have any additional conditions, other obligations are rarely imposed on it. Important! It is precisely on him that it is incumbent upon him at his own risk and risk to receive all permits for the importation of a load into the country, as well as to pay all the formalities at customs, unless otherwise agreed in advance and not specified in the papers.
Neither the contract of carriage nor the insurance contract have special obligations on the buyer. However, if he wants to take out insurance, then he will have to do it at his own expense. However, we already wrote that any data that is necessary for the preparation of the relevant documents must be provided by the seller.
More on cost sharing
However, the CPT delivery terms (Incoterms 2010) provide for some conditions under which the buyer will pay. Let's get to know them in more detail.
Unless otherwise specified in the contract, he will pay all costs incurred until delivery. However, if the documents do not indicate anything else, the supplier pays for all this. Again, subject to the availability of such a clause in the contract, it can be calculated for the services of unloading and loading of goods, but usually the supplier is responsible for this.
If the buyer did not accept the goods within the indicated period, although his delivery was carried out, then he pays for all additional costs incurred. In addition, the payment of unforeseen expenses (associated with the cargo) when transporting goods through the territory of another country (unless otherwise specified in the contract) is almost always the responsibility of the recipient.
So we reviewed the terms of delivery of CPT (Incoterms). 2012 brought new rules, but all the provisions described by us in them have remained unchanged.
Cases of force majeure
This refers to situations where a party cannot fulfill its obligations for reasons that are independent of the supplier or buyer. As a rule, these are natural disasters, destabilization of the political situation in the country or something like that. Most often in the contract there is a clause according to which the parties can separate amicably. If this does not happen, the situation is considered in the arbitration court.