Difference between CFR and CPT incoterms | CFR vs CPT

CFR (Cost and Freight) is an incoterm under which seller loads the goods at vessel after export clearance and pays for the freight (main carriage) till port of destination, and send all shipping documents to buyer. All risks and responsibilities are transferred from seller to buyer once vessel is onboard. Buyer arranges insurance.

Seller arrange to pack the goods, takes care of export clearance, arrange transportation to the port, arrange the carrier and pays ocean freight, loads the cargo into the vessel, pays for  documentation charges.
Buyer buyer's responsibilities are to arrange insurance, port charges at destination, import clearance (including duty and taxes) and local transportation at destination.

CPT (Carriage Paid To) is an incoterm under which seller clears (for export) the goods and hands over the goods to the carrier or a person nominated by buyer at a mutually agreed (by seller or buyer) place, from that point all risks are transferred to buyer. Seller also pays for the freight and destination terminal handling charges.

Seller packs the goods, arrange export clearance (including duties and taxes), arrange primary transportation, pays freight till named place at destination, seller also pays destination terminal handling charges and hands over the goods to the 1st carrier which can be a shipping line, railways, airline, freight forwarder, transporter or a person nominated by buyer.
Once goods are handed over to the 1st carrier, all risks and responsibilities are transferred from seller to buyer.
Buyer's responsibilities are to take insurance, arrange import clearance (including duties and taxes) and local transportation at destination.

Differences:
1. Main difference is CFR can used only for sea and inland waterways shipments but CPT can be used in any mode of shipment, CPT can be used for multimodal transportation also.

2 . CFR is inappropriate for containerized cargo as the containers are handed over to the shipping line at a distance from the vessel and shipping line carry out the loading operations instead of the seller or it's agent. But CPT can be used for containerized cargo.

3. In case of CFR risk is transferred from seller to buyer once seller loads the goods onboard the vessel, but in case of CPT risk is transferred once seller delivers the goods to the 1^st carrier (the place can be anywhere as per the mutual agreement between seller & buyer).

4. Under CFR delivery term seller bears the cost of freight and all operations until goods are loaded onboard the vessel, in case of CPT seller pays the cost of freight and all operations until goods are delivered to the 1^st carrier, seller pays additionally the destination terminal handling charges.

Costs	CFR	CPT
Packaging charges	Seller	Seller
Loading charges	Seller	Seller
Delivery to port/Place	Seller	Seller
Export clearance, Duty & taxes	Seller	Seller
Terminal handling (origin)	Seller	Seller
Loading on carrier	Seller	Seller
Freight cost (ocean/air/surface)	Seller	Seller
Insurance charges	Buyer	Buyer
Terminal handling (Destination)	Buyer	Seller
Delivery at destination	Buyer	Buyer
Unloading at destination	Buyer	Buyer
Import clearance, Duty & taxes	Buyer	Buyer

 

Check below for all 11 incoterms:

EXW (Ex Works)

FCA (Free Carrier)

FAS (Free alongside ship)

FOB (Free on Board)

CFR (Cost and Freight)

CIF (Cost Insurance & Freight)

CPT (Carriage paid to)

CIP (Carriage & Insurance paid to)

DAP (Delivered at Place)

DPU (Delivered at place unloaded) – This is new incoterm introduced in 2020

DDP (Delivered duty paid)