Trade knowledge / Incoterms CIP: Spotlight on Carriage and Insurance Paid To
Date: 2016-11-11
Incoterms CIP: Spotlight on Carriage and Insurance Paid To
Incoterms are the official International Chamber of Commerce (ICC) rules for the explanation of trade terms.
Incoterms 2010 are adhered to by all major trading nations of the world, and it is the authoritative text for determining how costs and risks are allocated to the parties conducting international transactions. Incoterms facilitate the conduct of international business by defining the responsibilities of the involved participants.
This is the seventh article in our series investigating the basic meaning of all 11 Incoterms.
We’ve also covered the following:
Free Carrier (FCA)
Delivered At Place (DAP)
Delivered Duty Paid (DDP)
Carriage Paid To (CPT)
Cost, Insurance and Freight (CIF)
Today, we’re discussing the Incoterm CIP, also known as Carriage and Insurance Paid To.
To learn more about which trade term is the best for your export, check out this chart of responsibilities.
What Does the CIP Trade Term Mean?
The Incoterm Carriage and Insurance Paid To (CIP) means “the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.” (ICC)
When Can CIP Be Used?
CIP can be used for any transport mode—air, courier, truck, rail, vessel or multi-modal.
Benefits and Considerations of CIP
With the CIP term, the seller also contracts for minimum insurance coverage against the buyer’s risk of loss of or damage to the goods during the carriage.
If the buyer wants more insurance, they should make an explicit agreement for additional insurance coverage in the sales contract or make their own arrangements for extra insurance.
Watch out for Terminal Handling Charges, which are made by the terminal operator. They may or may not be included by the carrier in their freight rates. The buyer should enquire whether the price includes THC to avoid surprises. (Source)
Learn More about Incoterms and CIP
Looking for more information about Incoterms? Check out the archive of Incoterms-related articles on our International Trade Blog.
To get you started, we’ve chosen several of our most popular articles along with other industry resources:
The Beginner's Introduction to Incoterms
An Introduction to Incoterms—Part 2: Why Do Incoterms Matter?
A Behind the Scenes Look at Incoterms
Incoterms 2010 Freight and Associated Charges
From EXW to DDP: Incoterms 2010 Plain and Simple
Incoterms Lesson: The Danger of Using Ex Works for Your Exports
Incoterms 2010 and the UCC: A Guide to International and Domestic Terms of Sale
Incoterms 2010
Shipping Solutions export software can help you streamline the process of recording which Incoterms version you’re using and make sure your documentation is correct throughout the transaction.
1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"TradeBearings".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
