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Who should bear the freight for agency export? Come and find out!

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Our company intends to find an agent to export goods, and currently, we are not very clear about the bearing of freight. I would like to ask, in the agency export business, is the freight generally borne by the principal or the agent? Are there any relevant industry practices or legal regulations? Will it vary according to different cooperation methods and contract agreements? I hope that experienced friends can help answer these questions so that I can have a clear idea and avoid disputes in subsequent cooperation.

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Professional consultant answers

William Yang
William YangYears of service:5Customer Rating:5.0

International logistics consultantConsult

In the agency export business, there is no absolutely fixed mode for bearing the freight, which mainly depends on the contract agreement signed by the principal and the agent. Generally speaking, if the principal only wants the agent to be responsible for matters related to the export process and controls the goods transportation link by itself, then the freight is most likely to be borne by the principal, and the agent only provides necessary assistance. If the principal entrusts the agent to handle all export matters, including transportation arrangements, and there is no special agreement in the contract, the agent may advance the freight first, and ultimately, the freight cost will still be included in the agency fee and charged to the principal. From the perspective of industry practices, most of the time, the principal bears the freight because the principal is more aware of the detailed transportation requirements of the goods. However, it should still be subject to the contract, and key information such as the party bearing the freight and the payment time should be clarified to avoid disputes.

At the legal level, as long as the contract agreement does not violate the mandatory provisions of laws and regulations, it is protected by law.

Amanda Yang
Amanda YangYears of service:3Customer Rating:5.0

Cost control consultantConsult

Generally, if the agency contract does not specify in detail, it is defaulted that the principal bears the freight. After all, the principal is the owner of the goods and has more decision-making power over the transportation arrangements.

Jennifer Wang
Jennifer WangYears of service:4Customer Rating:5.0

Market development consultantConsult

In some cases, in order to obtain business, the agent will promise to bear part of the freight to attract the principal to cooperate. It depends on how the two parties negotiate.

James Liu
James LiuYears of service:10Customer Rating:5.0

Foreign trade tax refund consultantConsult

If the agent is responsible for finding a freight forwarder for transportation, then the agent may be the one who pays the freight to the freight forwarder, but ultimately, the cost still needs to be settled with the principal.

David Li
David LiYears of service:6Customer Rating:5.0

Senior customs declaration consultantConsult

If the export involves some special trade terms, such as CIF (Cost, Insurance and Freight), the agent's responsibility for arranging transportation and paying the freight will be more explicit, and it must be implemented in accordance with the requirements of the terms.

Sarah Zhang
Sarah ZhangYears of service:8Customer Rating:5.0

Document expertConsult

If it is a consolidated cargo, the calculation of freight may be more complicated, but the subject bearing the freight still depends on the contract, and the principal may share the freight in proportion.

Robert Chen
Robert ChenYears of service:6Customer Rating:5.0

Customer service consultantConsult

Sometimes, the two parties will also negotiate to share the freight according to the transportation risk. For example, the principal bears the freight for the part with high transportation risk.

Emily Liu
Emily LiuYears of service:10Customer Rating:5.0

Settlement and payment expertConsult

If the agent can get a preferential price in the transportation link, it may also negotiate to bear part of the freight and then profit from the price difference.

Joseph Zhou
Joseph ZhouYears of service:10Customer Rating:5.0

Senior foreign trade managerConsult

If the goods have special transportation requirements proposed by the principal, it is very likely that the principal has to bear the freight.

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