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Under FOB terms, who pays the cost of releasing the goods to the carrier?
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We recently had a FOB shipment where the client requested electronic release. The freight forwarder is now asking us to pay the electronic release fee, but the client says that under the FOB terms, this fee should be borne by them. I want to ask: Who should bear the electronic release fee under FOB terms?
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
The FOB term itself does not explicitly stipulate who should bear the electronic release fee. This depends on the contractual agreement between you and the buyer. From a compliance perspective，the electronic release fee is an additional service charge for transportation documents and does not fall within the scope of costs typically allocated under the FOB term. If the contract does not specify otherwise，legally，the party requesting the electronic release should bear the cost. However，in practice，freight forwarders usually charge this fee to the shipper (you) at the port of departure. The core risk is that if you agree to electronic release without receiving payment，you will lose the cargo ownership certificate and face the risk of losing both the goods and the payment. It is strongly recommended to explicitly stipulate in the contract that "all fees arising from the electronic release of the bill of lading shall be borne by the buyer," or at least agree that "all payment must be completed before electronic release," and maintain written communication records.
Michael ZhangYears of service：6Customer Rating：5.0
Customs Declaration & Compliance ExpertStart a Chat
From a logistics operational perspective, the electronic release fee is typically paid by the shipper to the freight forwarder at the port of departure, but this is just a prepayment process and does not represent the ultimate party responsible. The industry practice is: whoever requests electronic release, who bears the cost. What you need to do is: 1) Confirm the amount of the electronic release fee in writing when booking the shipment to avoid the freight forwarder charging exorbitantly; 2) Pre-agree in the contract that the buyer will bear this fee; 3) Send the electronic release fee receipt to the buyer and request payment. If the buyer refuses, you have two options: either incorporate the fee into the product unit price, or require the freight forwarder to collect it from the consignee at the port of destination (supported by some shipping routes). Remember, under FOB terms, you only need to bear the costs until the goods cross the ship's rail, and electronic release does not fall within this scope.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
This is essentially a business negotiation issue that depends on your negotiating position and client relationship. If the client is powerful and the order profit is substantial, you can advance the payment, but it must be clearly stipulated in the contract that "the telegraphic transfer fee shall be paid by the seller in advance, and the buyer shall return it together with the payment". A more proactive strategy is to list the telegraphic transfer fee as an additional fee during the quotation stage and specify that "this fee is an additional cost incurred by the buyer's special requirements". Phrase template: "To assist you in picking up the goods quickly, we can arrange for telegraphic transfer, but according to our company's regulations, the additional cost of this service needs to be borne by the requesting party. We hope you can understand." This not only shows professionalism but also shifts the responsibility to the other party. Remember, under the FOB clause, you have no obligation to pay for the buyer's convenience.