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In CIF terms, which party is responsible for destination port fees?
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We recently shipped to Hamburg Port under CIF terms, but the client claims that we should bear the destination port fees, including terminal handling charges and customs clearance fees. However, the freight forwarder insists that these costs are the responsibility of the consignee under CIF terms. Now the client wants to file a complaint against us. So, who is responsible for the destination port fees under CIF terms?
Lucas LiuYears of service：8Customer Rating：5.0
Senior Operations ConsultantStart a Chat
Under the CIF terms，the allocation of responsibilities for port-of-destination costs is clearly stipulated in Incoterms 2020. The core principle you need to understand is that the transfer of risk and the assumption of costs do not fully coincide. According to the rules，the seller bears the freight and insurance costs to deliver the goods to the designated port of destination，but the risk transfers to the buyer once the goods cross the ship's rail at the loading port. Therefore，in principle，all port-of-destination-related costs such as dock handling charges (DTHC)，unloading fees，import customs clearance fees，tariffs，and transportation costs from the port to the final destination are borne by the buyer. To avoid disputes，it is recommended that you clearly specify "CIF [Port Name] as per Incoterms 2020" in the contract and add a clause stating that "all costs incurred at the port of destination shall be borne by the buyer." Additionally，if using the CIF term，the seller has no right to force the buyer to accept specific carriers or freight forwarders，as this may constitute an abuse of the terms.
Jason WuYears of service：10Customer Rating：5.0
International Logistics & Supply Chain ManagerStart a Chat
I've handled this matter hundreds of times, and the core principle is simple: CIF only covers freight and insurance to the destination port, but all miscellaneous fees incurred at the destination port are the responsibility of the consignee. Specifically, in your case involving the Hamburg port, the Destination Terminal Handling Charges (DTHC) are typically paid directly by the consignee to the local port agent, while customs clearance fees and tariffs are entirely the consignee's responsibility. A common pitfall in practice is that some shipping companies include DTHC in their freight rates, while others do not, leading to misunderstandings when clients are charged fees upon arrival. I recommend that you request your forwarder to provide a written cost breakdown in advance, clearly indicating "freight paid" and an estimate of destination-port-paid fees, and send it to your clients for review. This will both preempt potential complaints and avoid disputes after arrival. Remember, under CIF terms, your obligations essentially end upon the shipment's loading onto the vessel – subsequent costs are no longer your responsibility.
Daniel XuYears of service：10Customer Rating：5.0
Director of Import & Export OperationsStart a Chat
It's completely normal for clients to raise this question, and this is precisely an opportunity for you to demonstrate your professionalism and build trust with them. My advice is: Don't argue with the client about the terms, but instead, proactively provide a cost estimate table. In the email, you can write: "Regarding the port of destination fees, according to the CIF international trade terms, the freight and insurance fees are borne by us. Attached is a list of potential fees at the port of destination for your reference, including terminal handling fees of approximately XXX Euros and customs clearance fees of approximately XXX Euros, which will be directly paid by the consignee to the agent at the port of destination. To avoid unexpected expenses after arrival, we recommend you prepare this budget in advance." This approach clarifies responsibilities and helps clients estimate costs, demonstrating your attentive service. For important clients, you can consider listing port fees separately in the quote or even offering a small "port arrival fee subsidy" as a trust-building measure for first-time cooperation clients, but this would need to be included in your marketing costs. For contract terms, it's recommended to directly refer to the Incoterms original text to avoid ambiguous expressions like "CIF delivered to the door".