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Who Should Bear the FOB Export Agency Fee?

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I recently engaged in foreign trade exports using FOB terms. During negotiations with the client, we disagreed on the issue of export agency fees. I believe that since it's FOB, the client is responsible for chartering and booking shipping, so the agency fee should be their responsibility. However, the client thinks it's the exporter's responsibility. So, I'd like to ask: Who should bear the FOB export agency fee? Are there any relevant industry practices or regulations?

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Professional consultant answers

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

Customer service consultantConsult

Under FOB terms, there is no absolute rule for bearing export agency fees, which usually depends on negotiation between the buyer and seller. From an industry practice perspective, FOB means the seller is responsible for loading the goods onto the buyer's designated vessel at the specified port of shipment and bears all costs and risks until the goods are on board, while the buyer is responsible for chartering and booking shipping and paying freight.

Generally, if the agency fee mainly involves pre-shipment operations, such as customs clearance, inspection, port charges, and other export-related procedures, these fall under the seller's responsibility under FOB and are often borne by the seller.

However, if the agency fee is related to the buyer's designated freight forwarder or arises from the buyer's special requirements—such as additional agency services requested by the buyer that go beyond the seller's responsibilities—then it may be negotiated for the buyer to bear these costs. In any case, it's best to specify this clearly in the contract to avoid future disputes.

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

Settlement and payment expertConsult

Usually, the seller bears most of it because, under FOB, the seller is responsible for all steps until the goods are on the ship, and export agency fees often relate to this stage. But if agreed in advance, the buyer may also bear it.

Elizabeth Li
Elizabeth LiYears of service:3Customer Rating:5.0

Compliance and risk managerConsult

It depends on the specific business situation. If the agency fee arises from the buyer's special requirements, such as customized packaging handled by the seller, it's reasonable for the buyer to bear it.

Michelle Chen
Michelle ChenYears of service:3Customer Rating:5.0

Business coordination consultantConsult

Often, the principle of "who benefits, who pays" applies. If the agency fee benefits the seller's export process, the seller should bear it; if it benefits the buyer more, the buyer should bear it.

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

International logistics consultantConsult

In the industry, it's common for the seller to bear it, as they handle many procedures before shipment, and the export agency fee is part of these costs. However, the buyer and seller can negotiate adjustments to the.

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

Senior customs declaration consultantConsult

If the agency fee is closely tied to the seller's responsibilities like export customs clearance or port charges, the seller bears it. If it's more related to the buyer's shipping arrangements, the buyer should bear it.

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

Document expertConsult

Ultimately, it depends on the contract. Before signing, clarify the agency fee issue and specify who bears it to avoid future disputes.

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

Market development consultantConsult

If the seller has a long-term relationship with the freight forwarder and gets discounted agency fees, it may be more convenient for the seller to bear them. If the buyer designates the freight forwarder, the buyer may bear the fee.

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

Senior foreign trade managerConsult

Generally, agency fees arising from the seller's responsibilities before shipment are borne by the seller, while those related to the buyer's shipping decisions are borne by the buyer. Specific arrangements should be negotiated.

The relevant questions or replies only represent the user’s personal stance and do not represent any views of this website.

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