Who Should Bear the Freight Forwarding Costs in Foreign Trade Export?
Solved#Freight forwarding#
I’ve been in the foreign trade export business for a while, but I’ve always been a bit confused about who should bear the freight forwarding costs. Sometimes, clients seem to think it’s our responsibility as the seller, but I feel it shouldn’t always be on us. I’d like to ask: in general foreign trade export transactions, should the freight forwarding costs be covered by the seller or the buyer? Are there any common rules or distinctions for different scenarios? I’d appreciate insights from experienced colleagues.
Professional consultant answers
Joseph ZhouYears of service：10Customer Rating：5.0
Senior foreign trade managerConsult
The responsibility for freight forwarding costs in foreign trade export usually depends on the trade terms. If FOB (Free On Board) terms are used, it means the buyer arranges transportation, and the freight forwarding costs are generally borne by the buyer. The seller only needs to deliver the goods to the designated port and onto the vessel. However, under CIF (Cost, Insurance, and Freight) or CFR (Cost and Freight) terms, the seller is responsible for transportation and insurance (CIF includes insurance, CFR does not), so the freight forwarding costs are typically covered by the seller. Additionally, buyers and sellers can negotiate the cost responsibility based on specific transactions. If the contract explicitly states the cost allocation, it should be followed. For instance, in long-term collaborations with good relationships, one party might voluntarily bear the costs to maintain the partnership. In summary, trade terms are a key reference, but contract agreements and mutual negotiation are equally important.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
Generally, it depends on the trade terms: under FOB, the buyer pays the freight forwarding fees; under CIF or CFR, the seller pays. If the contract specifies otherwise, follow the contract. If not, default to the trade terms.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
It depends on your negotiation. If the buyer appoints the freight forwarder, the buyer likely covers the fees. If the seller arranges transportation with their own forwarder, the seller usually bears the costs.
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
For LCL (Less than Container Load) shipments, the allocation of freight forwarding costs can be more complex and may require negotiation between both parties to determine a fair split.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
For new clients, follow standard trade terms to determine who bears the freight forwarding costs. For long-term clients, flexibility in negotiation may be applied to maintain the relationship.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
If the goods are urgent, one party might voluntarily cover the freight forwarding costs to expedite the transaction.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
For small orders, the seller might directly bear the freight forwarding costs to simplify the process and avoid disputes with the buyer.
Jennifer WangYears of service：4Customer Rating：5.0
Market development consultantConsult
In highly competitive markets, sellers might absorb the freight forwarding costs to attract buyers.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
In some special cases, the freight forwarding costs might be shared between both parties, depending on the specific circumstances.