CIP – what is it?
CIP, short for “Carriage and Insurance Paid to” (Carriage and Insurance Paid To), is one of the commercial terms (Incoterms) used in international trade. Under this term, the seller is responsible for the cost of transporting the goods and insuring them to the specified location. However, responsibility for the risk of loss or damage to the goods passes to the buyer when the goods are transferred to the first carrier.
Frequently Asked Questions
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What is the difference between CIP and CPT?
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The primary difference between CIP and CPT is insurance. In the case of CIP, the seller is responsible for both the cost of transportation and for insuring the goods to the specified location. In contrast, with CPT, the seller covers only the cost of carriage, and insurance of the goods is the responsibility of the buyer.
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Can CIP be used in all modes of transportation?
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Yes. Like CPT, CIP is a universal term and can be used in all modes of transportation, including road, rail, air or sea.
What is the information on CIP?
What information is included in the CIP price?
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The CIP price includes the cost of the goods, transportation costs and insurance costs to the specified location. However, it does not include customs duties, taxes or the cost of unloading the goods at the destination.
Who is a “first carrier” in the context of CIP?
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“First carrier” is the person or company to whom the seller transfers the goods for onward transportation to the destination. This can be a shipping company, road, rail or air carrier. When the goods are transferred to the first carrier, the risk of loss or damage passes to the buyer.
