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CIP Carriage and Insurance Paid To: The Protected Passage
The term CIP Carriage and Insurance Paid To is similar to CPT, but with the added requirement that the seller purchases insurance for the goods. Picture yourself on that same train, but this time, you’re also insured for the journey. This is CIP. Since its birth in 1980, CIP has been the safer alternative for multi-modal transport, mirroring CIF’s protective approach.
Obligaciones del vendedor:
Deliver the goods to the carrier at the named place of shipment.
Pay for the cost of transport and insurance to the named place of destination.
Despachar las mercancías para la exportación.
Obligaciones del comprador:
Despachar las mercancías para la importación, pagando los posibles derechos de aduana.
Bear all risks of loss or damage once the goods have been delivered to the carrier.
CIP instance:
El vendedor: A Chinese producer of replacement lithium batteries for electrical tools
El comprador: A middle brand of electrical tool parts in Texas, USA,
Incoterm de envío: CIP (Carriage and Insurance Paid to) for two containers of lithium batteries
Under CIP, the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place, contracts for and pays the costs of carriage necessary to bring the goods to the named place of destination, and also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage.
He aquí cómo se desglosarían los costes:
- Coste del producto: Agreed price for the batteries is $30,000.
- Logística local: Costs for delivering goods from the factory to the port in China (seller’s responsibility), let’s say $1,500.
- Despacho aduanero de exportación: Costs for the goods to be cleared for export by Chinese customs (seller’s responsibility), let’s say $500.
- Gastos de transporte: Cost of shipping goods across the ocean to the destination port in Texas, USA (seller’s responsibility under CIP), let’s say $3,000.
- Seguro: Cost of insurance to cover the buyer’s risk of loss or damage to the goods during carriage (seller’s responsibility under CIP), let’s say $1,000.
So, the total cost to the seller (CIP price) is $30,000 + $1,500 + $500 + $3,000 + $1,000 = $36,000.
Envío:
- Import Customs Clearance: Duties and taxes for goods to be cleared by US customs (buyer’s responsibility), let’s say $4,000.
- Logística local: Costs for delivering goods from the port to the buyer’s warehouse in Texas, USA (buyer’s responsibility), let’s say $1,500.
So, the total cost to the buyer is the CIP price ($36,000) plus the costs of Import Customs Clearance ($4,000) and Local Logistics ($1,500). That is, $36,000 + $4,000 + $1,500 = $41,500.
Under CIP, the seller has the obligation to arrange and pay for the carriage of the goods to the agreed destination, and also to procure insurance against the buyer’s risk. However, the risk transfers from the seller to the buyer as soon as the goods have been handed over to the first carrier.
CPT term is closed to CIP term.
