Who should pay the ocean freight in agency export?
Solved#Freight forwarding#
Our company hired an agent to handle export shipments, but now there's uncertainty about who should pay the ocean freight. The agent says according to industry practice, they only handle export procedures, and the freight should be paid by us. However, I think since we've entrusted them with the export, this cost should be included in their service. I'd like to ask: who should actually pay the ocean freight in agency export? Are there any relevant industry regulations or standards?
Professional consultant answers
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
The responsibility for paying ocean freight in agency export typically depends on the terms of the agency export agreement. If the agreement clearly states that the principal (your company) should bear the ocean freight, then you are responsible. If the agreement doesn't specify, generally speaking, the agent's main responsibility is assisting with export customs clearance, inspection, foreign exchange verification, and other export procedures. Ocean freight isn't normally included in standard agency services, so the principal would usually pay.
However, in practice, some agents may include ocean freight in their total service fee to win business. If you feel the agent's charges are too high, you can negotiate to redefine the cost-sharing arrangement. Ultimately, the key is the agreement terms. Without specific terms, the principal tends to be responsible, but this can be negotiated.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
Generally, the ocean freight is paid by the exporting principal, because the agent only provides agency services, while the freight is a cost generated by transporting goods and usually isn't included in agency service fees.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
It depends on what was agreed when discussing the agency service. If it was clearly stated that the agency fee covers everything, then the agent should pay the freight. If not mentioned, the principal pays by default.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
In typical agency exports, the principal pays the ocean freight. After all, the agent mainly handles export-related processes, while transportation costs are usually borne by the cargo owner.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
If the agency export agreement doesn't specify, industry practice dictates that the exporting company pays the ocean freight. However, this can be negotiated with the agent.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Generally, whoever owns the goods pays the freight. For agency exports, that means the principal pays unless otherwise agreed.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
For agency exports, unless previously agreed otherwise, the principal almost always pays the ocean freight. The agent won't cover this cost without reason.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Normally, the principal pays the ocean freight. Of course, if the agent wants to attract business and agrees to include it, then they pay.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
It mainly depends on the agency agreement. If unspecified, the principal usually pays the ocean freight, as it's a direct cost of shipping goods.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Most often, the principal pays the ocean freight. The agent's services focus more on export procedures, and freight isn't part of their standard responsibilities.