Incoterms
What is CIP?
Learn CIP (Carriage and Insurance Paid To) under Incoterms® 2020 — responsibilities, risk transfer, pricing, and FAQs.
CIP adds insurance to CPT — seller pays freight and insurance to destination; risk at first carrier.
Meaning and When to Use CIP
CIP (Carriage and Insurance Paid To) is an Incoterms® 2020 rule for international trade. CIP applies per Incoterms® 2020 rules for the agreed mode of transport — confirm port or place names in contracts.
Always state the full format in contracts — e.g. "CIP Shanghai, Incoterms® 2020" — not the acronym alone.
Choose CIP based on who can best arrange carriage, insurance, and import clearance.
Division of Responsibilities, Risk, and Cost
Under CIP, responsibilities typically split as follows:
- Seller: Deliver goods per the rule at the named place or port
- Seller: Provide invoice and typical export documents
- Seller: Pay costs up to the delivery point defined by the term
- Buyer: Arrange import clearance and onward carriage where applicable
- Buyer: Bear risk from the rule's transfer point
- Buyer: Pay costs from transfer onward
Risk and cost transfer follow Incoterms® 2020 CIP — document the exact named place and version on all shipping documents.
Pricing and Cost Practice
Build CIP quotes from product cost plus seller-side charges to the delivery point. Use related calculators on Global Trade Toolkit to model totals before confirming orders.
Documents and Compliance
Typical documents: commercial invoice, packing list, transport document (B/L or AWB), and certificates as required. State "CIP, Incoterms® 2020" with named place/port.
Examples
Example — CIP export quote
Seller quotes CIP with named place, currency USD, and line-item breakdown for buyer landed-cost review.
Example — Contract clarity
Parties add inspection and payment terms separate from CIP — Incoterms do not cover quality or price payment timing.
FAQ
- What does CIP mean in shipping?
- CIP (Carriage and Insurance Paid To) defines seller/buyer obligations under Incoterms® 2020 for the chosen mode and named place.
- When does risk transfer under CIP?
- At the point specified by Incoterms® 2020 for this rule — always name place/port in the contract.
- Is CIP still valid after 2020?
- Parties may use Incoterms® 2020 by clearly stating the version on documents.
- Can CIP be used with any currency?
- Yes — state currency on invoice; Incoterms rule is independent of currency.
- How do I calculate a CIP price?
- Sum product cost and seller charges to the delivery point; use our trade calculators for detail.
Conclusion
Understanding CIP helps align quotes, documents, and risk. Use our related calculators and comparison articles for your lane.