WhyExport RepresentationCould Freight Allocation Become a Pain Point for Enterprises?

According to 2023 statistics from the General Administration of Customs, 78% offoreign tradeenterprises encounter accounting discrepancies in freight handling. Freight allocation not only involves transportation cost control but also directly affectsExport DrawbackQuotaandVAT Deduction. Common practical issues include:

• Maritime Transportation/Air TransportationDetermining responsibility for connecting charges in segmented transportation
• Disputes over allocation of LCL cargo by volume/weight/value
• Handling of ancillary fees such as customs clearance charges and port miscellaneous fees

How to divide freight responsibilities under FOB and CIF terms?

According to the latest 2025 Incoterms, freight allocation rules under different trade terms are clearly defined:

• FOB terms: Seller bears costs to port of shipment, including:
  • Terminal Handling Charges (THC) at loading port
  • Export ClearanceRelated expenses
• CIF terms: Seller must pay freight to port of destination, but note:
  • Additional war risks insurance requires separate agreement
  • Demurrage charges at destination port are typically borne by buyer

What scientific calculation methods exist for freight allocation?

Drawing from Fortune 500 companies practical experience, we recommend 4 mainstream allocation methods:

• Weight Proportion Method: Suitable for bulk commodities
  • Calculation formula: Individual freight = (Single item gross weight/Total gross weight) × Total freight
• Volume Proportion Method: Ideal for lightweight bulky cargo
• Value Allocation Method: Preferred for high-value goods
• Hybrid Billing Method: Combining weight and volume factors

How to process freight invoices for compliant tax deductions?

According to the 2025 VAT reform plan, attention should be paid to freight tax deductions:

• Must obtainSpecial VAT InvoiceorCustoms payment documents
• International segment freight cannot be deducted (except for CIF term exports)
• Customs declaration agency fees need to separately list service fees and advanced freight

What are the common freight allocation misconceptions?

In our audits, we found common mistakes made by enterprises include:

• Including destination port inspection fees in export costs
• Ignoring the impact of exchange rate fluctuations on prepaid freight
• Failing to distinguish between deductible and non-deductible expenses
• Using a single allocation standard for LCL cargo

How do international payment methods affect freight allocation?

After the implementation of new cross-border RMB settlement rules in 2025:

• RMB payments can avoid exchange rate risks
• L/CFreight payment terms must be clearly specified under the item
• DP payment method requires advance confirmation of freight payment responsibility

What key points should be noted when selecting an agency company?

High-quality agents should have:

• ERP system with automatic allocation calculation
• Real-time exchange rate update mechanism
• Itemized detailed billing structure
• Tax compliance guidance capability