A practical guide to CIP shipping — including seller and buyer responsibilities, insurance, risk transfer, CIP vs CPT and CIF, multimodal transport, and shipping from China.
SEE CIP RESPONSIBILITIESUnder CIP (Carriage and Insurance Paid To), the seller delivers the goods to the carrier or another person nominated by the seller at the agreed place of delivery, pays carriage to the named place of destination, and obtains the insurance required by the CIP rule for the buyer's benefit.
Like CPT, cost and risk transfer at different points. The seller pays transportation and insurance to the named destination, but risk transfers to the buyer when the goods are delivered to the carrier at the agreed delivery point.
The seller contracts and pays transport to the named place of destination.
The seller obtains the insurance required by the CIP rule for the buyer's benefit.
Risk transfers when the goods are delivered to the carrier at the agreed delivery point.
CIP combines seller-paid carriage and seller-arranged insurance with an earlier risk transfer to the buyer.
CIP often involves two different locations. One controls risk transfer, while the other controls how far the seller-paid carriage extends.
This is where the seller hands the goods to the carrier and completes delivery under CIP.
EXAMPLE: SHENZHEN TERMINAL / AIRPORT CARGO FACILITY.This is the place to which the seller pays the main transportation cost.
EXAMPLE: LOS ANGELES TERMINAL OR ANOTHER NAMED DESTINATION.CIP is a “C” rule. The seller pays carriage and insurance beyond the point where the seller's transport risk has already ended.
The insurance obligation does not change the risk-transfer point. It provides protection for the buyer after risk has passed.
Under Incoterms® 2020, CIP generally requires the seller to obtain insurance equivalent to Institute Cargo Clauses (A), or similar broader cover, unless the parties agree otherwise.
The insurance should normally cover at least the contractual amount required by the rule and remain effective for the agreed transport period. The exact policy terms, exclusions and claims process still matter.
| COST / TASK | SELLER | BUYER |
|---|---|---|
| Goods & export packaging | YES | — |
| Export customs clearance | YES | — |
| Delivery to carrier | YES | — |
| Carriage to named destination | YES | — |
| CIP-required cargo insurance | YES | Additional cover if desired |
| Import customs clearance | — | YES |
| Import duties & taxes | — | YES |
| Onward transport after paid destination | — | YES |
CIP and CPT share the same basic transport and risk-transfer structure. The main difference is insurance.
Seller pays carriage to the named destination but has no Incoterms® obligation to obtain cargo insurance.
INSURANCENOT REQUIREDSeller pays carriage and also obtains the insurance required under the CIP rule.
INSURANCESELLER ARRANGES REQUIRED COVERBoth CIP and CIF require seller-arranged insurance, but they apply to different transport situations and use different delivery points.
Risk transfers when goods are delivered to the carrier.
DEFAULT INSURANCE: BROADER COVERRisk transfers when goods are on board the vessel.
DEFAULT INSURANCE: MINIMUM COVERContainerized cargo is often handed to a carrier at a terminal, depot or warehouse before the vessel is loaded. CIP can reflect that handover while still allowing the seller to pay onward carriage and arrange insurance.
This makes CIP useful where the buyer wants seller-arranged transport and insurance but the actual risk transfer should occur at the carrier handover point.
CIP can work well when a Chinese supplier arranges the main freight and insurance while the buyer accepts transport risk once the cargo is delivered to the carrier.
Goods and export packaging are prepared.
Seller completes China export formalities.
Risk transfers to the buyer at the agreed point.
Sea, air or multimodal freight continues to destination.
Insurance is obtained according to CIP requirements.
Buyer handles import and onward movement.
State the named destination precisely, and also identify the agreed delivery point where the seller hands the goods to the carrier and risk transfers.
The supplier completes export clearance and delivers the cargo to the agreed carrier in Shenzhen. Risk transfers to the buyer at that point.
The supplier still pays the agreed carriage to Los Angeles and obtains the insurance required under CIP. The buyer handles U.S. import clearance, duties, taxes and onward delivery.
RISK TRANSFERS IN SHENZHEN — SELLER STILL PAYS AND INSURES TO LOS ANGELES.Exact documentation depends on cargo, mode, route and regulatory requirements.
CIP means Carriage and Insurance Paid To. The seller delivers the goods to the carrier, pays carriage to the named destination and obtains the insurance required under the CIP rule.
Risk transfers when the goods are delivered to the carrier at the agreed delivery point, even though the seller pays carriage and insurance to the named destination.
The seller contracts and pays the carriage to the named place of destination.
Incoterms® 2020 generally requires broader default insurance cover under CIP, commonly equivalent to Institute Cargo Clauses (A), unless the parties agree otherwise.
Yes. CIP can be used for any mode or combination of modes, including air freight and multimodal transportation.
Both use seller-paid carriage and the same basic early risk-transfer structure. CIP additionally requires seller-arranged cargo insurance.
CIP can be used for any mode and generally requires broader default insurance. CIF is sea / inland-waterway only and uses minimum default insurance cover.
Yes. CIP can be well suited to containerized and multimodal cargo delivered to a carrier or terminal before vessel loading.
Send us the supplier location, carrier handover point, named CIP destination, cargo details and final delivery address. We can review the route and compare alternative freight structures.
GET A FREE QUOTEThis page is a general educational summary and is not the official ICC Incoterms® 2020 text or legal, insurance, tax or customs advice. Insurance policy wording, exclusions, the agreed delivery point, named destination and sales contract matter. Refer to the official ICC rules when incorporating CIP into a contract.
ChengYu Ship can help compare CIP with CPT, CIF, FCA and destination-based shipping options for your route.
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