Who should bear the freight forwarder's export agency fees?
Solved#Export agent#
I recently have a batch of goods to export and I've found a freight forwarder to provide export agency services. Now, when it comes to the freight forwarder's export agency fees, I'm not quite sure who should pay this expense. Should it be me, the consignor, or the consignee? Is there any industry practice or relevant rules in this regard? If it's not clearly stated in the contract between the two parties, how is it usually handled? I hope someone who knows the ropes can enlighten me.
Professional consultant answers
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
There is no absolute standard for who should pay the freight forwarder's export agency fees. It mainly depends on the trade contract. Among the common trade terms, for example, under FOB (Free on Board), usually the consignor is responsible for paying all the costs before the goods cross the ship's rail at the port of shipment, including the freight forwarder's export agency fees, because the consignor is responsible for arranging the means of transportation, etc. Under CIF (Cost, Insurance and Freight), the seller needs to bear the freight, insurance premium, etc. to transport the goods to the port of destination, and most likely the freight forwarder's export agency fees are also borne by the seller. However, if the contract does not clearly stipulate, according to general business customs, usually the party who entrusts the freight forwarder to handle the export agency services bears the cost. Therefore, it is recommended that when signing the trade contract or the freight forwarder entrustment contract, clearly agree on the bearer of the freight forwarder's export agency fees to avoid subsequent disputes.
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
Generally, it depends on the trade terms. If it is EXW (Ex Works), the buyer bears all the costs after picking up the goods from the factory. Most likely, the buyer will pay the freight forwarder's export agency fees because the seller is only responsible for delivering the goods to the freight forwarder designated by the buyer at the factory.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
In actual business, if the relationship between the two parties is good, they may also negotiate to share the freight forwarder's export agency fees, not necessarily strictly following the trade terms. The key is that both parties reach an agreement.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
If the contract doesn't state it and the two parties are at an impasse, you can also refer to the industry's common practice. In the local export business of this type of product, usually follow the party who typically bears the freight forwarder's export agency fees.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
If it's a long-term cooperative customer and there was a similar cost-bearing model for previous similar businesses, if not agreed this time, the bearer of the freight forwarder's export agency fees can be determined by referring to the previous practice.
William YangYears of service：5Customer Rating：5.0
International logistics consultantConsult
Sometimes, the bearer of the freight forwarder's export agency fees is also related to the market situation. For example, when the market competition is fierce, the seller may take the initiative to bear the costs to attract the buyer in order to conclude the transaction.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
If the freight forwarder is designated by the buyer, then without special agreement, it is more likely that the buyer will bear the freight forwarder's export agency fees.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
If the consignor is eager to ship the goods and the consignee is not willing to bear the freight forwarder's export agency fees, the consignor may bear the fees on its own in order to ship the goods smoothly.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
When the added value of the goods is low, in order to reduce costs, the two parties may negotiate repeatedly on the issue of who bears the freight forwarder's export agency fees to seek a reasonable sharing method.