Who Should Bear the Freight Costs in Export Agency? Find Out Now!
Solved#Export agent#
I’m planning to start an export agency business but am unclear about who should bear the freight costs. Could someone explain, under normal circumstances, who is responsible for the freight in export agency—the principal or the agent? Are there any industry standards, or does it vary depending on the cooperation model? I’d appreciate professional advice to avoid future disputes.
Professional consultant answers
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
In export agency business, the party responsible for freight is usually specified in the cooperation agreement between the principal and the agent. Common scenarios include:
Under the "Free On Board (FOB)" model, the buyer typically covers freight from the loading port to the destination, while the seller (principal) bears all costs before the goods cross the ship’s rail, including domestic transportation and storage. Here, the export agent usually doesn’t directly pay freight but assists with domestic logistics.
Under "Cost, Insurance, and Freight (CIF)" or "Cost and Freight (CFR)" models, the seller (principal) covers freight to the destination port, with the agent mainly assisting in logistics.
Specific arrangements may vary based on negotiations, so clear communication and contractual terms are essential to avoid disputes.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Typically, the contract specifies the freight-bearing party. If unspecified, industry practice follows trade terms: FOB means the buyer covers ocean freight; CIF or CFR means the seller does. The agent usually doesn’t pay but handles logistics.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
This depends on negotiations. Some principals delegate freight to the agent for convenience, factoring costs into agency fees. Others handle freight separately with carriers while the agent manages export procedures.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
For small orders, principals may prefer agents to handle freight for a service fee. Larger orders often strictly follow trade terms for freight allocation.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
It also depends on the agency agreement. Some contracts stipulate fixed agency fees with freight reimbursed by the principal, while others bundle freight into a lump-sum fee.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
In long-term partnerships, parties might share freight costs, though this is rare. Most follow trade terms or contract terms.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
From a risk-control perspective, principals often prefer bearing freight per trade terms to manage costs, while agents avoid freight-related risks.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
Market conditions can influence freight allocation. During peak seasons, principals may ask agents to share costs, which agents might accept to secure business.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
For LCL shipments, miscellaneous fees may arise, requiring prior negotiation beyond standard trade term practices.