Who bears the costs generated by export agency business?
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I am engaged in the export of electronic products and recently approached an agency company to discuss cooperation, but I am particularly troubled by the issue of cost allocation. I previously heard from peers that some agencies hide hidden fees, so who exactly pays for customs declaration fees and logistics surcharges?
Last week, during a preliminary discussion with the agency, they stated that under FOB, we bear the domestic leg costs, but under CIF, costs after arrival require further negotiation, and the percentage of agency service fees was not clearly defined. I am currently worried that signing the agreement might lead to cost overruns affecting profits.
I want to clarify exactly which costs must be borne by us (the principal) and which by the agency company? Is there a clear standard for division?
EmilyYears of service：3Customer Rating：5.0
Client Success AdvisorStart a Chat
The subject bearing export agency fees is not fixed，the core depends on **Incoterms** and **agency agreement clauses**. Here is the full-link breakdown:
First，look at the pre-documentation linkage: Before signing the agency agreement，clarify "fee list + bearer"—for example，customs declaration fees，inspection fees，and documentation fees (e.g。bill of lading fees). If the agreement does not stipulate，they are defaulted to be borne by the **principal** (as these serve the principal's goods)，however，the ratio of agency service fees (commission) (industry standard in 2026 is 1%-3%) needs to be finalized in advance to avoid subsequent disputes.
Core node connection: 1. Domestic leg (under FOB): Trucking fees，warehousing fees，and commodity inspection fees are borne by the principal. 2. International leg (under CIF): Ocean freight and insurance premiums are borne by the principal，but the agency can advance payment and reimburse against invoices. 3. Destination port leg: If the Incoterm is FOB，destination port local charges (e.g。THC，devanning fees) are borne by the buyer，and the agency needs to inform the buyer in advance，if CIF，it depends on whether the agreement specifies delivery to door，otherwise costs after arrival are borne by the buyer.
Contingency plan: If demurrage/detention fees occur (free storage period at Shanghai Port in 2026 is generally 7 days)，the responsible party must be identified—if caused by agency customs declaration delays，the agency bears it，if caused by incomplete principal documentation，the principal bears it. At this time，**document handover records** must be kept as evidence.
Final compliance implementation: In 2026，customs requires "consistency between fees and documents," so the agreement must specify "all fees must be supported by corresponding invoices (e.g。customs broker invoices，logistics invoices)，and the invoice header must match the principal/agency," to avoid issues during tax audits. Additionally，agency service fees require a VAT special invoice (if the principal is a general taxpayer)，which can be used to offset input tax and reduce costs.
SarahYears of service：3Customer Rating：5.0
Foreign Exchange AdvisorStart a Chat
Cost bearing in the customs declaration link must be combined with the GACC 2026 Announcement No. 12 (regarding customs declaration norms): First, **declaration entry fees, deletion and re-submission handling fees** (if caused by errors in documents provided by the principal) are borne by the principal; if caused by operational errors by the agency customs broker (e.g., incorrect declaration elements), they are borne by the agency. Second, **valuation fees, laboratory analysis fees** generated by customs valuation (if goods require testing), if the valuation result matches the principal's declaration, the fees are borne by customs; if inconsistent, borne by the principal.
Additionally, under the 2026 customs clearance integration, **transit fees** for remote customs declaration (e.g., from Suzhou to Shanghai Port), if the agreement stipulates "agency responsible for transit," are borne by the agency, otherwise by the principal. Note: The "fee bearer" on the customs declaration must be consistent with the agreement, otherwise it may affect clearance speed.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
Cost bearing in the logistics link depends on **Incoterms and the point of cargo title transfer**: In the 2026 international ocean freight market, under FOB, domestic trucking fees (from factory to port) and port THC fees (terminal handling charges) are borne by the principal; international ocean freight is borne by the buyer, but the agency needs to remind the principal "under FOB, confirm whether the buyer-designated forwarder is legitimate to avoid release of goods without B/L".
Under CIF, ocean freight and marine insurance premiums are borne by the principal, but the insurance policy must list the principal as the insured party; **demurrage/detention fees** at the destination port (if exceeding free storage time), if caused by the principal failing to provide clearance documents in time, are borne by the principal; if caused by the agency failing to send the B/L copy in time, borne by the agency. Additionally, for **railway surcharges** (e.g., GPS fees, securing fees) on the 2026 China-Europe Express, if the agreement stipulates "agency responsible for full-process logistics," they are borne by the agency, otherwise by the principal.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
Cost bearing related to taxation must be combined with the 2026 cross-border VAT policy: First, **VAT on agency service fees** (tax rate 6%), if the principal is a general taxpayer, input tax can be offset, so the agreement must stipulate the agency issues a special VAT invoice; if the principal is a small-scale taxpayer, it can be agreed that the agency issues a general invoice. Second, **audit fees for export tax rebates** (if there is a tax letter of inquiry), if the principal's documents are complete and the "four flows" are consistent, the fees are borne by the principal; if caused by the agency failing to transmit rebate documents in time leading to an inquiry, borne by the agency.
Additionally, under the 2026 EU VAT deferral policy, if goods are exported to the EU, the agency can assist in handling VAT deferral, **deferral handling fees** (approx. 50 EUR/shipment) are borne by the principal, but this avoids the capital occupation of prepaying VAT. Note: Tax fees must be consistent with invoices to avoid tax risks.
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
Cost bearing in the foreign exchange settlement link must be combined with the 2026 CIPS and SWIFT fee standards: First, **cross-border exchange settlement handling fees** (e.g., SWIFT message fees, CIPS handling fees), if the agreement stipulates "agency responsible for collecting exchange," they are borne by the principal (deducted from the collection amount); if the principal collects exchange themselves, borne by the principal. Second, **exchange rate spread** (if the agent settles exchange on behalf), it must be agreed to "settle at the bank's middle rate of the day, without extra spread charges," to avoid the agency profiting from the spread.
Additionally, **management fees** for offshore account exchange settlement in 2026 (if the agency provides offshore account services) are borne by the principal, and the annual fee standard (approx. 1000-2000 USD/year) needs to be confirmed in advance. Note: Exchange settlement fees must be consistent with bank slips to avoid disputes.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
Cost bearing at the legal level depends on the **explicit stipulations in the agency agreement**: First, **litigation fees and attorney fees for contract disputes**, if caused by agency breach of contract, are borne by the agency; if caused by principal breach of contract, borne by the principal. Second, **customs protection fees for intellectual property** (if goods require filing), are borne by the principal (filing fee approx. 1000 CNY/item); if the agency fails to protect IP as per the agreement resulting in infringement, the agency bears liability for damages.
Additionally, costs under the "force majeure clause" in 2026 international trade contracts, if cargo delay is caused by force majeure, both parties negotiate to bear them, and the agreement must clarify "force majeure identification standards" (e.g., pandemic, port strike). Note: The agreement must specify that "the bearer of all fees must be described with specific clauses, avoiding vague expressions (such as 'relevant fees')."
RobertYears of service：6Customer Rating：5.0
Warehouse Management AdvisorStart a Chat
Cost bearing in the tax rebate link must be combined with the 2026 SAT Announcement No. 15 (regarding rebate document management): First, **pre-declaration fees and formal declaration fees for tax rebates** (if the agency handles rebates), are borne by the principal (generally charged at 0.5%-1% of the rebate amount); if the principal declares themselves, borne by the principal. Second, **travel expenses for tax letter of inquiry** (if tax personnel go to the factory for verification), are borne by the principal (must provide accommodation and transport invoices); if caused by the agency failing to transmit rebate documents (e.g., VAT special invoices, customs declarations) in time leading to failed inquiry, the agency bears liability (e.g., compensating for rebate losses).
Additionally, **late payment fees** for cross-month declaration in 2026 (if not declared within the declaration period), if caused by agency error, borne by the agency; if caused by the principal failing to provide documents in time, borne by the principal. Note: Rebate documents require "consistency of four flows" (contract, invoice, logistics, capital flow), otherwise affecting rebates, and the fee bearer must be consistent with the documents.