Who pays what charges for a shipment..??

Who pays what charges for a shipment..??

This is one of the big questions in the minds of a lot of newcomers to the business of exporting and importing..

As far as the shipping line is concerned, in general, the person placing the booking with the shipping line is responsible and liable to pay all or some of the costs.. This could be the direct shipper or consignee or their agent(s)..

However, depending on the type of order and Incoterms® used, there will be cases where the orders are placed differently and there might be a couple of agents involved..

MoneyAgent A might pay all charges upto say FCA Durban (load port).. Agent B would then pay all charges from FCA Durban to destination..

When I say charges upto FCA Durban is paid by Agent A..?? FCA stands for Free Carrier.. Under FCA rules, the Seller should deliver the goods, cleared for export, to the carrier selected by the Buyer..

If the buyer decides to book the shipment on carrier haulage basis, then the carrier will pick up the cargo at the seller’s premises and the seller’s responsibility will then cease on the goods are loaded into the container.. From that point on, the Buyer bears the costs and risks of moving the goods to destination..



All charges upto FCA Durban would involve all charges from packing the cargo into the container, any inspection charges, customs clearance, cargo dues (wharfage), other documentation charges, weighment charges (if applicable), transportation to the port, THC at the load port..

Agent B would pay the ocean freight, BAF, CAF, ISPS, haz surcharge (where applicable) and any other charges related to the carriage of the cargo on board the ship, because his liability starts from the moment the cargo has crossed the ships rail and is on board the ship..

The shipping line will release the bill of lading to the legal owner of the cargo or the shipper or the company that placed the booking with them only after all their charges are paid to them by 1 or more agent(s)..

Be part of the discussion and share your views about the article here..

9 comments on “Who pays what charges for a shipment..??

  1. Htet Ko Zin says:

    Thanks a lot, sir

  2. Andrew says:

    INCOTERMS CIF, but the providerĀ“s fordwarder in China wants to charge me BAF, THC AND CISF, WHAT IS CORRECT?

  3. faiez says:

    I have a car coming from Japan to Durban port. i paid R21000 cif.
    on a RORO vessel. The clearing agents charges R23000 with all custom charges. Does that seem right?

    1. Ray Goldberg says:

      No. Not unless he is charging import duty as well which I highly suspect he is. You need a detailed charge sheet so you can see what he is charging you but always bets to look up Incoterms terminology

  4. Alexander Robertson says:

    Hi, Please be wary in that FOB now has nothing to do with crossing the ship’s rail under Incoterms 2010 rules. Risk transfers once cargo is stowed and secured.

    As for FCA, the risk transfers from seller to buyer once the contaner is in the care of the carrier at the depot/terminal/collected carrier hauliage from the seller’s premises. It is the duty of the seller to pack the cargo into the contaner and ensure that it is handed to the carrier at the agreed point as above, customs cleared for export. Costs after this are for the account of the buyer. anyone can contact me as an accredited trainer in Incoterms 2010 rules for information, cargoconsult@telkomsa.net

  5. Prabir DasGupta says:

    Interesting and informative.
    Kindly advise me about the term FCA .
    I would like to know about the extent of shipper’s responsibility and where does the responsibility of the buyer start?
    Is it the shipper’s responsibility and cost to pay for the empty container placement at his warehouse is say about 100kms from the port of shipment, stuff the cargo in the container, lash and chalk the cargo, if required to make the cargo safe for ocean journey, Does his responsibility/cost end here? Does he have to take from the carrier/agent any document other than B/L after sailing of the vessel?

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