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CIP stands for multiple things, and one of its meanings is related to airports. In the context of airports, CIP stands for Capital Improvement Program, which is a planning tool used by airports to outline project priorities and funding sources over a period of years. This document is essential for maintaining, developing, or expanding an airport, and it serves as the basis for distributing Federal Aviation Administration (FAA) and state funds. Another meaning of CIP is Carriage and Insurance Paid To, which is relevant to the shipping industry and outlines the responsibilities of the seller and buyer in an agreement.
| Characteristics | Values |
|---|---|
| Full Form | Carriage and Insurance Paid To |
| Seller's Responsibility | Delivery, delivery costs, and insurance costs of the goods until they are transferred to the first carrier tasked with transporting the goods |
| Buyer's Responsibility | All risk after the goods are transferred to the first carrier |
| Insurance | The seller is required to arrange for minimum insurance cover, to the invoice value of the goods |
| Cargo Type | Non-containerized |
| Transport Mode | Any mode of transport including air freight, trucks, railways, etc |
| Federal Aviation Administration Capital Investment Plan | A 5-year plan that describes the National Airspace System (NAS) modernization programs and lists the activities to be accomplished during that period |
| Airport CIP | Used to plan for future projects and required funding needs |
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What You'll Learn
- CIP stands for Carriage and Insurance Paid To
- CIP is a term used in Incoterms, or International Chamber of Shipping agreements
- CIP is also the abbreviation for Capital Improvement Program, a planning tool for airport development
- The Federal Aviation Administration's Capital Investment Plan is another CIP
- CIP can also stand for a commercially important person, who gets airport VIP lounge access
CIP stands for Carriage and Insurance Paid To
CIP stands for "Carriage and Insurance Paid To", a global trade term devised by the International Chamber of Commerce (ICC) and accepted worldwide. It is an Incoterm, which means that the seller will pay freight and insurance costs when sending goods to a buyer's representative at a mutually agreed-upon location. The seller must insure the goods being sent for 110% of their contract value, though the buyer can request additional coverage if they wish.
CIP is similar to CPT (Carriage Paid To), but the key difference is that CIP includes insurance as part of the seller's responsibilities. CIP is one of only two Incoterms rules that explicitly lay out the responsibility for insurance, the other being Cost, Insurance, and Freight (CIF). This will typically be an original insurance policy covering just the transaction or a certificate issued by the insurer under the seller's existing open marine policy.
CIP is used for all modes of transport, whereas CIF applies only to sea freight. This means that for CIF, responsibility transfers at the origin seaport, whereas for CIP it transfers at any agreed-upon location in the origin country. CIP is eligible for any form of transportation, including road, rail, sea, inland waterway, air, or multimodal transport.
CIP first appeared in Incoterms in 1980 as "Freight Carriage and Insurance Paid To", but this was shortened in the 1990 rules. The only difference between CPT and CIP is that the CIP seller must contract for insurance against the buyer's risk. The level of cover was changed in Incoterms 2020 to be the maximum of Institute Cargo Clauses (A), (Air) or similar, for 110% of the CIP value, or an "all risks" cover.
In CIP, the seller assumes all risk until the goods are delivered to the first carrier at the place of shipment, not the place of destination. Once the goods are delivered to the first carrier, the buyer is responsible for all risks. The seller is responsible for the cost of carriage as well as insurance coverage until the freight reaches the named place of destination.
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CIP is a term used in Incoterms, or International Chamber of Shipping agreements
When it comes to moving goods from one country to another, international shippers and exporters should be familiar with Incoterms. Incoterms are a set of 11 internationally recognised rules that define the responsibilities of sellers and buyers. They are a collection of agreements defined by the International Chamber of Shipping, covering all aspects of coastal and inland waterway transportation terms. Incoterms specify which party is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.
Incoterms are important because they improve transaction smoothness by clearly defining who is responsible for what at each step of the transaction. They are widely used terms of sale, with each rule stipulating which party is responsible for tasks such as packing the goods for transport and bearing the costs of any pre-shipment inspections. For example, each Incoterm rule specifies the seller's obligations for cargo delivery and clarifies when delivery takes place.
CIP (Carriage and Insurance Paid To) is one of the most commonly used Incoterms. It means that the seller is responsible for delivery, delivery costs, and insurance costs until the goods are transferred to the first carrier. CIP can be used for any mode of transport, including air freight, trucks, railways, and sea or inland waterway transport. It includes all costs up to the named destination, such as loading on a vessel at a port of shipment in the country of origin.
The main disadvantage of CIP terms is that the buyer bears all the risk until the goods reach their final destination. This means that if something goes wrong with the shipment after delivery to the carrier, such as loss or damage, the buyer cannot claim compensation from anyone except the seller. Therefore, most international traders prefer to use CIF (Cost, Insurance & Freight) terms, where the seller pays for goods to be shipped, but not for cargo insurance or loading.
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CIP is also the abbreviation for Capital Improvement Program, a planning tool for airport development
CIP is also an abbreviation for Capital Improvement Program, a planning tool for airport development. The program provides grants to public agencies and, in some cases, to private owners, operators, and entities for the planning and development of public-use airports. These airports are included in the National Plan of Integrated Airport Systems (NPIAS). The program also supports planning and capital projects for more than 3,300 public-use and rural airports.
The Capital Improvement Program establishes guidelines for managing and maintaining two federal plans that are essential to airport development: the NPIAS and the Airports Capital Improvement Plan (ACIP). The program discusses the NPIAS project database, which supports these plans and is used to prepare the Secretary of Transportation's biennial NPIAS Report.
The grants provided by the Capital Improvement Program can be used for a variety of projects, including planning and capital improvements. These improvements may relate to runways, taxiways, airport signage, lighting, and markings. Additionally, the funding can enhance airport safety, capacity, security, and civil rights compliance.
In certain situations, the Capital Improvement Program funding can also be used for rehabilitation projects and the development of terminals, hangars, and non-aviation infrastructure. More than 50% of the program's funding is allocated to small hub and non-hub airports, as well as airports eligible for non-primary entitlements, which are typically rural.
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The Federal Aviation Administration's Capital Investment Plan is another CIP
The Federal Aviation Administration (FAA) is an operating mode of the US Department of Transportation. The FAA's Capital Investment Plan (CIP) is a 5-year plan that outlines the modernization programs for the National Airspace System (NAS) and details the activities to be undertaken during that period. The CIP includes initiatives to upgrade existing systems and continue the transition to the Next Generation Air Transportation System (NextGen).
The CIP is developed by the FAA's Office of Investment Planning and Analysis, which is responsible for supporting strategic investment decision-making within the agency. This office conducts detailed reviews of schedule, cost, and benefits estimates for each program alternative, assessing the overall business case, including strategic alignment, acquisition and support strategy, risk, and economic return.
The Office of Investment Planning and Analysis also plays a crucial role in contract procurement decisions, ensuring that each contract is supported by a robust business case and that pre-award contract planning is adequate. This process involves various stakeholders, including the Joint Resources Council, the Capital Budget for establishing the investment's Acquisition Program Baseline, and the Capital Investment Team for capital budget formulation.
The CIP is an important tool for the FAA to prioritize competing investments and ensure efficient allocation of resources. It provides a framework for modernizing air transportation systems and enhancing airspace management. By investing in both system upgrades and the adoption of new technologies, the CIP contributes to the FAA's mission of ensuring safe, efficient, and seamless air travel.
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CIP can also stand for a commercially important person, who gets airport VIP lounge access
CIP can stand for a commercially important person, who is either an exporter of products or a high-value business client. CIPs are selected based on factors such as the amount of exports, income tax, value-added tax, the type of business, and employment. These individuals receive VIP lounge access at airports, and their family members are prioritized when booking cabins at government hospitals.
While exclusive VIP lounges still exist at airports, the term "VIP" is not commonly used anymore. Instead, airport lounges are now typically accessible through memberships, day passes, or certain credit cards. Lounges offer a quiet and comfortable space away from the busy airport terminals, providing amenities such as complimentary food and beverages, Wi-Fi, and charging points.
Priority Pass is a popular global network of airport lounges, with locations in over 600 airports in 148 countries. Membership with Priority Pass allows access to more than 1,300 lounges worldwide, regardless of the airline or ticket class. Other airport lounges may be exclusive to specific airlines or ticket types, such as first-class or suites class tickets.
Some notable VIP airport lounges include the "Private Suite" terminal at LAX, the "First Wing" at London's Heathrow Airport, and the "Clubhouse" by Virgin Atlantic, also at Heathrow. The "VIP Centre" at Amsterdam Schiphol Airport is known for its design by Marcel Wanders and includes a section reserved for the Dutch royal family. At Doha's Hamad International Airport, the Al Safwa Lounge offers fine dining, a dedicated dessert room, private offices, a spa, and more.
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Frequently asked questions
CIP stands for Capital Improvement Program, which is a document that guides future investments in airport projects. It identifies project priorities and funding sources over a period of years and is used to plan for future projects and their funding needs.
The purpose of a CIP is to maintain, develop, or expand an airport. It serves as the basis for how funding is distributed from the Federal Aviation Administration (FAA) and state sources. Projects eligible for federal funding are typically funded at 90% with federal grants and 10% with local funds.
Airport CIPs can include projects such as terminal and hangar design and construction, runway extensions, lighting and visual aids, land acquisition, and environmental tasks.
To be most effective, an airport CIP should include 20 years of projects. This helps to illustrate to local and state governments the need for long-term aviation funding.
CIP stands for "Carriage and Insurance Paid To" in shipping, where the seller pays for freight and insurance up to an agreed-upon location. CIF, or "Cost, Insurance & Freight", is similar but applies only to sea freight and requires the buyer to bear all risks.
