--- title: "How is the freight-bearing party clearly divided according to trade terms in export agency business?" description: "Many foreign trade enterprises，when entrusting export agency，fail to clarify the freight-bearing party and confuse the rights and responsibilities of trade terms，which often lead to disputes such as demurrage and logistics delay，and even affect export tax rebates. It is necessary to accurately divide responsibilities according to trade terms and agency agreement clauses，clearly specify the freight payment nodes and dispute resolution mechanisms in the agreement in advance，and coordinate with the..." url: "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html" language: "en" type: "Q&A" category: "Export Agency Q&A" datePublished: "2026-07-12" dateModified: "2026-07-12" brand: "Zhongshen Trading China" answerCount: 8 --- # How is the freight-bearing party clearly divided according to trade terms in export agency business? ## Question I am the person in charge of a small micro enterprise that has just started cross-border e-commerce export in Shanghai. Last month, I entrusted Zhongshen to act as an export agent for a batch of custom home goods to Germany. When signing the agency agreement, I didn't read the freight clauses carefully, and only verbally told the contact person to follow the FOB model. As a result, the freight forwarder suddenly asked me to pay the sea freight, saying that the agent asked me to pay. Now the goods have arrived at the Port of Hamburg, and there are signs of demurrage. This batch of goods is an urgent order for an old customer. The customer will cancel the order if the goods are detained in the port for more than 3 days. I am in a panic, afraid of losing the order and damaging the customer relationship, afraid of spending unnecessary money, and worried that the dispute will affect the subsequent export tax rebates. After all, small companies have thin profits and can't afford such troubles. I would like to ask who should bear the freight under this export agency model? What should I do now to minimize the losses? ## Answers ### Answer 1 — Best Answer First，we need to expose the common misconceptions in the industry: many small and medium-sized foreign trade enterprises will confuse the rights and responsibilities of trade terms with the agency agreement clauses，and only use verbal agreements instead of written clarifications，which is the core cause of freight disputes. If no timely remedy is taken，chain negative reactions will be caused: if the goods are detained in the port beyond the prescribed period，high demurrage and detention charges will be incurred，and the goods may even be auctioned by the customs，at the same time，it will lead to the cancellation of orders by customers，affecting the enterprise's credit，and may also trigger the export tax rebate verification by the tax department due to the mismatch between documents and rights and responsibilities，delaying the tax rebate progress，which has a great impact on small micro enterprises with thin profits. Physical risk isolation measures: Immediately **sign a written supplementary agreement** to clarify the freight-bearing party corresponding to the trade terms，and send a copy of the agreement to the freight forwarder to lock in the division of rights and responsibilities，at the same time，coordinate with the agent to negotiate with the freight forwarder to apply for **temporary demurrage exemption policy**，and prioritize the pickup and customs clearance of the goods to avoid expanding losses. Exclusive loss mitigation tips: If the terms are not clearly specified in the agency agreement，according to the FOB clause in Incoterms 2020，the overseas buyer shall bear the sea freight. At this time，the agent can assist in issuing a trade term certificate to the freight forwarder，requiring the freight forwarder to collect the fee from the overseas buyer，at the same time，keep all communication records and trade documents as evidence for subsequent disputes. If it involves export tax rebates，timely inform the tax department of the situation to avoid affecting the tax rebate progress. **status:** accepted **Author:** Jason Wu **Date:** 2026-07-12 ### Answer 2 In the export customs declaration process, the clarification of the freight-bearing party directly affects the filling of the freight declaration item on the customs declaration form. If the declared freight-bearing party does not match the actual situation, the customs will initiate a price review procedure, requiring the enterprise to provide supporting materials such as trade contracts, agency agreements, and freight invoices. If the materials cannot be submitted within the prescribed period, the customs declaration form will be suspended, the goods will be detained, and even subsequent customs audits will be triggered. Enterprises need to ensure that the "freight" column on the customs declaration form completely matches the bearing party agreed in the agency agreement and trade terms. If there is a temporary adjustment, a supplementary explanation must be submitted to the customs before customs declaration to avoid price review disputes. **status:** suggested **Author:** Daniel Xu **Date:** 2026-07-12 ### Answer 3 From the perspective of the entire international logistics chain, the division of freight needs to be refined to specific nodes: Under the FOB term, the exporter shall bear the loading fees and terminal miscellaneous fees at the port of shipment, while the sea freight and destination port miscellaneous fees shall be borne by the buyer; Under the CIF term, the exporter shall bear the port of shipment miscellaneous fees, sea freight and freight insurance, while the destination port miscellaneous fees shall be borne by the buyer. If the agency agreement does not clarify the terms, immediately check the freight payment clauses on the bill of lading. If the bill of lading is marked "FREIGHT COLLECT", the buyer shall pay; if marked "FREIGHT PREPAID", the seller shall pay. At the same time, if demurrage has been incurred, you can apply to the freight forwarder for an extension of the free detention period, or coordinate with the buyer to advance the payment and deduct it from the payment. **status:** suggested **Author:** Cindy Chen **Date:** 2026-07-12 ### Answer 4 From the perspective of cross-border taxation, the clarification of the freight-bearing party will affect the handling of VAT input tax deduction and export tax rebates. If the exporter bears the freight, it is necessary to obtain a valid special VAT invoice for freight as the input tax deduction voucher, and include the freight in the FOB price scope when declaring export tax rebates; if the buyer bears the freight, the exporter does not need to include the freight in the FOB price, and shall not deduct the corresponding input tax. In addition, if the VAT deferral model is adopted, the freight-bearing party must be consistent with the VAT taxpayer, otherwise it will trigger a related party transaction investigation by the tax authorities and lead to the cancellation of the VAT deferral qualification. **status:** suggested **Author:** Lucas Liu **Date:** 2026-07-12 ### Answer 5 In the cross-border payment and settlement link, the clarification of the freight-bearing party must match the payment and settlement path. If the exporter bears the freight, it must be paid through the agent's compliant cross-border account, and the SWIFT message must be marked "sea freight for export agency business" to avoid being listed as an abnormal transaction by the foreign exchange bureau; if the buyer bears the freight, the buyer shall be required to pay the freight to the account designated by the freight forwarder, and the corresponding amount shall be clearly deducted when settling the payment to avoid the suspicion of capital reflux. In addition, it is necessary to ensure that the freight clauses in the agency agreement are consistent with the remarks on the payment and settlement vouchers to ensure the compliance of the payment and settlement operations. **status:** suggested **Author:** Linda Gao **Date:** 2026-07-12 ### Answer 6 From a legal perspective, the freight liability in export agency business shall be based on the written agreement as the core basis, and verbal agreements do not have mandatory legal effect. If the parties do not clarify the terms, the liability shall be divided according to the relevant provisions of the Civil Code of the People's Republic of China (Contract Part) and Incoterms 2020, combined with trade terms and transaction habits. If a dispute arises, it can be resolved through negotiation first. If the negotiation fails, an application for arbitration may be filed according to the arbitration clause in the agency agreement, or a lawsuit may be filed with the people's court with jurisdiction. At the same time, keep all communication records, trade documents, agency agreements and other materials as evidence to protect their legitimate rights and interests. **status:** suggested **Author:** Michael Zhang **Date:** 2026-07-12 ### Answer 7 In the export tax rebate audit link, the clarification of the freight-bearing party will affect the filing and review of tax rebate documents. If the exporter bears the freight, the freight invoice, freight forwarder bill of lading, logistics contract and other documents shall be included in the scope of tax rebate document filing to ensure that the documents are consistent with the customs declaration form and agency agreement; if the buyer bears the freight, it is necessary to note that the freight is borne by the buyer when declaring the tax rebate, and provide a copy of the voucher for the buyer's payment of the freight. If the freight-bearing party is not clearly specified, the tax authorities will initiate a verification procedure, requiring the enterprise to explain the division of freight rights and responsibilities. If valid proof cannot be provided, the export tax rebate will be suspended or denied. **status:** suggested **Author:** Victor Sun **Date:** 2026-07-12 ### Answer 8 From the perspective of supply chain planning, the division of freight-bearing parties needs to be combined with the enterprise's cost structure and market strategy. If the enterprise adopts the strategy of small profits but quick turnover, it can choose the FOB term to shift the sea freight to the buyer and reduce its own logistics costs; if the enterprise needs to control the quality of the entire logistics chain, it can choose the CIF term to bear the freight and insurance costs by itself to ensure logistics efficiency. At the same time, you can sign a long-term logistics cooperation agreement with the agent to strive for freight discounts, or adopt a freight installment payment model to relieve financial pressure. In addition, it is necessary to regularly sort out the use of trade terms, optimize the supply chain cost structure, and improve the market competitiveness of the enterprise. **status:** suggested **Author:** Kevin Lin **Date:** 2026-07-12 ## Related Categories - [Import Agency Q&A](https://www.sh-zhongshen.com/en/qa/cat-import-agency/) - [Export Tax Rebate Q&A](https://www.sh-zhongshen.com/en/qa/cat-export-tax-rebate/) - [Customs Declaration Q&A](https://www.sh-zhongshen.com/en/qa/cat-customs-declaration/) - [Freight Forwarding Q&A](https://www.sh-zhongshen.com/en/qa/cat-freight-forwarding/) - [Forex Settlement Q&A](https://www.sh-zhongshen.com/en/qa/cat-forex-settlement/) - [Entrepôt Trade Q&A](https://www.sh-zhongshen.com/en/qa/cat-entrepot-trade/) - [General Trade Q&A](https://www.sh-zhongshen.com/en/qa/cat-general-trade/) ## Related Resources - [Trade Services](https://www.sh-zhongshen.com/en/services/) - [Trade Cases](https://www.sh-zhongshen.com/en/cases/) - [Trade Wiki](https://www.sh-zhongshen.com/en/wiki/) - [Trade Class](https://www.sh-zhongshen.com/en/guide/) - [Global Trade Services](https://www.sh-zhongshen.com/en/country/) ## Structured Data ```json [ { "@context": "https://schema.org", "@type": "QAPage", "inLanguage":"en", "isPartOf": { "@id":"https://www.sh-zhongshen.com/en/#website" }, "publisher":{ "@id":"https://www.sh-zhongshen.com/en/#organization" }, "mainEntity": { "@type": "Question", "name": "How is the freight-bearing party clearly divided according to trade terms in export agency business?", "text": "I am the person in charge of a small micro enterprise that has just started cross-border e-commerce export in Shanghai. Last month, I entrusted Zhongshen to act as an export agent for a batch of custom home goods to Germany. When signing the agency agreement, I didn't read the freight clauses carefully, and only verbally told the contact person to follow the FOB model. As a result, the freight forwarder suddenly asked me to pay the sea freight, saying that the agent asked me to pay. Now the goods have arrived at the Port of Hamburg, and there are signs of demurrage. This batch of goods is an urgent order for an old customer. The customer will cancel the order if the goods are detained in the port for more than 3 days. I am in a panic, afraid of losing the order and damaging the customer relationship, afraid of spending unnecessary money, and worried that the dispute will affect the subsequent export tax rebates. After all, small companies have thin profits and can't afford such troubles. I would like to ask who should bear the freight under this export agency model? What should I do now to minimize the losses?", "answerCount": 8, "upvoteCount": 6, "datePublished": "2026-07-12T17:02:08Z", "dateModified": "2026-07-12T17:06:43Z", "author": { "@type": "Person", "name": "Zhongshen Trading China", "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html" } ,"acceptedAnswer": { "@type": "Answer", "text": "First，we need to expose the common misconceptions in the industry: many small and medium-sized foreign trade enterprises will confuse the rights and responsibilities of trade terms with the agency agreement clauses，and only use verbal agreements instead of written clarifications，which is the core cause of freight disputes. If no timely remedy is taken，chain negative reactions will be caused: if the goods are detained in the port beyond the prescribed period，high demurrage and detention charges will be incurred，and the goods may even be auctioned by the customs，at the same time，it will lead to the cancellation of orders by customers，affecting the enterprise's credit，and may also trigger the export tax rebate verification by the tax department due to the mismatch between documents and rights and responsibilities，delaying the tax rebate progress，which has a great impact on small micro enterprises with thin profits. Physical risk isolation measures: Immediately sign a written supplementary agreement to clarify the freight-bearing party corresponding to the trade terms，and send a copy of the agreement to the freight forwarder to lock in the division of rights and responsibilities，at the same time，coordinate with the agent to negotiate with the freight forwarder to apply for temporary demurrage exemption policy ，and prioritize the pickup and customs clearance of the goods to avoid expanding losses. Exclusive loss mitigation tips: If the terms are not clearly specified in the agency agreement，according to the FOB clause in Incoterms 2020，the overseas buyer shall bear the sea freight. At this time，the agent can assist in issuing a trade term certificate to the freight forwarder，requiring the freight forwarder to collect the fee from the overseas buyer，at the same time，keep all communication records and trade documents as evidence for subsequent disputes. If it involves export tax rebates，timely inform the tax department of the situation to avoid affecting the tax rebate progress.", "upvoteCount": 6, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#acceptedAnswer", "datePublished": "2026-07-12T19:17:09Z", "author": {"@type": "Person","name": "Jason Wu","url": "https://www.sh-zhongshen.com/en/team/jason-wu/"} } ,"suggestedAnswer": [ { "@type": "Answer", "text": "In the export customs declaration process, the clarification of the freight-bearing party directly affects the filling of the freight declaration item on the customs declaration form. If the declared freight-bearing party does not match the actual situation, the customs will initiate a price review procedure, requiring the enterprise to provide supporting materials such as trade contracts, agency agreements, and freight invoices. If the materials cannot be submitted within the prescribed period, the customs declaration form will be suspended, the goods will be detained, and even subsequent customs audits will be triggered. Enterprises need to ensure that the "freight" column on the customs declaration form completely matches the bearing party agreed in the agency agreement and trade terms. If there is a temporary adjustment, a supplementary explanation must be submitted to the customs before customs declaration to avoid price review disputes.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-2", "datePublished": "2026-07-12T18:51:17Z", "author": {"@type": "Person","name": "Daniel Xu","url": "https://www.sh-zhongshen.com/en/team/daniel-xu/"} } , { "@type": "Answer", "text": "From the perspective of the entire international logistics chain, the division of freight needs to be refined to specific nodes: Under the FOB term, the exporter shall bear the loading fees and terminal miscellaneous fees at the port of shipment, while the sea freight and destination port miscellaneous fees shall be borne by the buyer; Under the CIF term, the exporter shall bear the port of shipment miscellaneous fees, sea freight and freight insurance, while the destination port miscellaneous fees shall be borne by the buyer. If the agency agreement does not clarify the terms, immediately check the freight payment clauses on the bill of lading. If the bill of lading is marked "FREIGHT COLLECT", the buyer shall pay; if marked "FREIGHT PREPAID", the seller shall pay. At the same time, if demurrage has been incurred, you can apply to the freight forwarder for an extension of the free detention period, or coordinate with the buyer to advance the payment and deduct it from the payment.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-3", "datePublished": "2026-07-12T18:48:27Z", "author": {"@type": "Person","name": "Cindy Chen","url": "https://www.sh-zhongshen.com/en/team/cindy-chen/"} } , { "@type": "Answer", "text": "From the perspective of cross-border taxation, the clarification of the freight-bearing party will affect the handling of VAT input tax deduction and export tax rebates. If the exporter bears the freight, it is necessary to obtain a valid special VAT invoice for freight as the input tax deduction voucher, and include the freight in the FOB price scope when declaring export tax rebates; if the buyer bears the freight, the exporter does not need to include the freight in the FOB price, and shall not deduct the corresponding input tax. In addition, if the VAT deferral model is adopted, the freight-bearing party must be consistent with the VAT taxpayer, otherwise it will trigger a related party transaction investigation by the tax authorities and lead to the cancellation of the VAT deferral qualification.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-4", "datePublished": "2026-07-12T18:20:13Z", "author": {"@type": "Person","name": "Lucas Liu","url": "https://www.sh-zhongshen.com/en/team/lucas-liu/"} } , { "@type": "Answer", "text": "In the cross-border payment and settlement link, the clarification of the freight-bearing party must match the payment and settlement path. If the exporter bears the freight, it must be paid through the agent's compliant cross-border account, and the SWIFT message must be marked "sea freight for export agency business" to avoid being listed as an abnormal transaction by the foreign exchange bureau; if the buyer bears the freight, the buyer shall be required to pay the freight to the account designated by the freight forwarder, and the corresponding amount shall be clearly deducted when settling the payment to avoid the suspicion of capital reflux. In addition, it is necessary to ensure that the freight clauses in the agency agreement are consistent with the remarks on the payment and settlement vouchers to ensure the compliance of the payment and settlement operations.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-5", "datePublished": "2026-07-12T17:30:24Z", "author": {"@type": "Person","name": "Linda Gao","url": "https://www.sh-zhongshen.com/en/team/linda-gao/"} } , { "@type": "Answer", "text": "From a legal perspective, the freight liability in export agency business shall be based on the written agreement as the core basis, and verbal agreements do not have mandatory legal effect. If the parties do not clarify the terms, the liability shall be divided according to the relevant provisions of the Civil Code of the People's Republic of China (Contract Part) and Incoterms 2020, combined with trade terms and transaction habits. If a dispute arises, it can be resolved through negotiation first. If the negotiation fails, an application for arbitration may be filed according to the arbitration clause in the agency agreement, or a lawsuit may be filed with the people's court with jurisdiction. At the same time, keep all communication records, trade documents, agency agreements and other materials as evidence to protect their legitimate rights and interests.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-6", "datePublished": "2026-07-12T17:27:16Z", "author": {"@type": "Person","name": "Michael Zhang","url": "https://www.sh-zhongshen.com/en/team/michael-zhang/"} } , { "@type": "Answer", "text": "In the export tax rebate audit link, the clarification of the freight-bearing party will affect the filing and review of tax rebate documents. If the exporter bears the freight, the freight invoice, freight forwarder bill of lading, logistics contract and other documents shall be included in the scope of tax rebate document filing to ensure that the documents are consistent with the customs declaration form and agency agreement; if the buyer bears the freight, it is necessary to note that the freight is borne by the buyer when declaring the tax rebate, and provide a copy of the voucher for the buyer's payment of the freight. If the freight-bearing party is not clearly specified, the tax authorities will initiate a verification procedure, requiring the enterprise to explain the division of freight rights and responsibilities. If valid proof cannot be provided, the export tax rebate will be suspended or denied.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-7", "datePublished": "2026-07-12T17:15:27Z", "author": {"@type": "Person","name": "Victor Sun","url": "https://www.sh-zhongshen.com/en/team/victor-sun/"} } , { "@type": "Answer", "text": "From the perspective of supply chain planning, the division of freight-bearing parties needs to be combined with the enterprise's cost structure and market strategy. If the enterprise adopts the strategy of small profits but quick turnover, it can choose the FOB term to shift the sea freight to the buyer and reduce its own logistics costs; if the enterprise needs to control the quality of the entire logistics chain, it can choose the CIF term to bear the freight and insurance costs by itself to ensure logistics efficiency. At the same time, you can sign a long-term logistics cooperation agreement with the agent to strive for freight discounts, or adopt a freight installment payment model to relieve financial pressure. In addition, it is necessary to regularly sort out the use of trade terms, optimize the supply chain cost structure, and improve the market competitiveness of the enterprise.", "upvoteCount": 0, "url": "https://www.sh-zhongshen.com/en/qa/who-bears-freight-in-export-agency-based-on-trade-terms.html#suggestedAnswer-8", "datePublished": "2026-07-12T17:06:43Z", "author": {"@type": "Person","name": "Kevin Lin","url": "https://www.sh-zhongshen.com/en/team/kevin-lin/"} } ] } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ {"@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.sh-zhongshen.com/en/"},{"@type": "ListItem", "position": 2, "name": "Q&A", "item": "https://www.sh-zhongshen.com/en/qa/"},{"@type": "ListItem", "position": 3, "name": "Export Agency Q&A", "item": "https://www.sh-zhongshen.com/en/qa/cat-export-agency/"} ,{"@type": "ListItem", "position": 4, "name": "How is the freight-bearing party clearly divided according to trade terms in export agency business?"} ] } ] ```