Who is responsible for agency freight and miscellaneous expenses under FOB export? Come and find out!
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I am currently engaged in export trade using the FOB (Free on Board) Incoterm. When communicating with the agent about the responsibility for freight and miscellaneous expenses, I have some uncertainties. I would like to ask everyone, under the FOB export mode, who is responsible for the agency freight and miscellaneous expenses? Is it the seller or the buyer? Are there any specific regulations or points that are easily confused? I hope experienced friends can help answer this, so I can avoid problems in this area.
Trade Expert Insights Answers
Daniel KimYears of service：4Customer Rating：5.0
Commodity Inspection and Quarantine ConsultantStart a Chat
Under the FOB (Free on Board) export mode, by convention, the seller is responsible for all expenses incurred before the goods cross the ship's rail at the port of shipment, including agency freight and miscellaneous expenses. This means the seller is responsible for transporting the goods to the designated port of shipment and delivering them onto the ship designated by the buyer. Agency freight and miscellaneous expenses incurred during this period, such as inland transportation fees, customs declaration fees, and terminal handling charges, are all paid by the seller.
Expenses incurred after the goods cross the ship's rail, such as ocean freight and insurance premiums, are borne by the buyer. However, in actual business practice, there may be special agreements. For example, the buyer and seller may explicitly state in the contract that certain agency freight and miscellaneous expenses are borne by the buyer. Therefore, the key is to clearly define the cost sharing in the contract to avoid disputes later. If the contract is not explicit, the above convention will apply.
Thomas LiYears of service：7Customer Rating：5.0
Import Licensing AdvisorStart a Chat
Generally, under FOB terms, the seller bears the freight and miscellaneous expenses for the goods before they are loaded onto the ship, such as the freight from the factory to the port and storage fees before loading. However, if both parties negotiate and agree, the buyer can also bear some of the costs. Everything is subject to the contract.
Emma ZhaoYears of service：3Customer Rating：5.0
Export Documentation SpecialistStart a Chat
Under the FOB Incoterm, the seller is responsible for export customs clearance procedures and related expenses, which include a portion of the agency freight and miscellaneous expenses. However, if the buyer entrusts the seller to handle some additional matters that incur costs, both parties can discuss who should bear them.
Olivia LiuYears of service：6Customer Rating：5.0
Foreign Exchange Risk ManagerStart a Chat
Normally, the seller bears the agency freight and miscellaneous expenses until the goods cross the ship's rail. However, if the buyer requests the seller to perform additional services, such as special packaging that increases freight and miscellaneous expenses, then this portion of the expenses may have to be borne by the buyer.
Linda GuoYears of service：3Customer Rating：5.0
Trade Dispute MediatorStart a Chat
In FOB exports, the seller bears the freight and miscellaneous expenses for the goods delivered to the ship, which is an international common practice. However, in actual transactions, the buyer and seller can flexibly negotiate and reallocate the responsibility for these costs.
Kevin HuangYears of service：3Customer Rating：5.0
E-Commerce Export AdvisorStart a Chat
Under the FOB mode, the seller is responsible for the expenses of delivering the goods to the ship at the port of shipment, and agency freight and miscellaneous expenses are included. However, if the contract stipulates otherwise, the contract will prevail, and the buyer and seller will decide among themselves.
Anthony LuoYears of service：10Customer Rating：5.0
Trade Compliance ExpertStart a Chat
Typically, the seller bears the agency freight and miscellaneous expenses before the goods are loaded onto the ship, including inland transportation, port operations, and other costs. However, if market conditions are special, both parties can adjust the responsible party through negotiation.
David ChenYears of service：10Customer Rating：5.0
Trade Compliance AdvisorStart a Chat
Under FOB, the seller is presumed to bear the agency freight and miscellaneous expenses before the goods cross the ship's rail. If there are special arrangements, such as the buyer designating a freight forwarder, resulting in additional costs, both parties need to agree in advance on who will bear them.
Sophia WangYears of service：6Customer Rating：5.0
International Logistics CoordinatorStart a Chat
According to FOB rules, the seller is responsible for the agency freight and miscellaneous expenses before the goods are loaded onto the ship. However, in specific business dealings, the buyer and seller can determine the final responsible party in the contract based on the actual situation.
Robert TanYears of service：5Customer Rating：5.0
International Market Development AdvisorStart a Chat
In FOB exports, the seller bears the agency freight and miscellaneous expenses before the goods are delivered to the ship. However, the transaction parties can change the cost-bearing method through the contract based on their own circumstances.