05/02/2026
Why Should the Seller Pay the Booking Fee and Telex Release Fee in FOB Trade?
In international trade, FOB (Free On Board) is one of the most commonly used terms, but it often leads to disputes between buyers and sellers over certain costs, especially regarding who should bear the booking fee and telex release fee. Many suppliers may question when faced with invoices from the buyer's appointed freight forwarder: Should I really be responsible for these fees?
According to international trade conventions and the nature of the FOB term, the answer is yes. Below, we explain from several perspectives why these two fees are typically borne by the seller.
1. FOB Responsibility Allocation Based on Incoterms® 2020
According to the International Chamber of Commerce’s Incoterms® 2020, the core responsibilities under FOB are:
· Seller’s Obligations: Responsible for loading the goods onto the vessel nominated by the buyer at the specified port of shipment and bearing all costs and risks until the goods are loaded on board.
· Buyer’s Obligations: Responsible for arranging the vessel and paying all costs incurred after the goods are loaded on board, including ocean freight, insurance, destination port charges, etc.
The Key Point:
Although the buyer appoints the freight forwarder and arranges transportation, the act of "booking" is essentially a necessary step to fulfill the seller’s obligation of "loading the goods onto the vessel." Therefore, the booking fee, as an initial operational cost in the shipping process, naturally falls under the seller’s responsibilities as part of the local charges at the port of shipment.
2. Nature and Allocation of Booking Fees and Telex Release Fees
1) Booking Fee
This is the operational fee charged by the freight forwarder or shipping company for arranging space and processing booking documents.
Since booking occurs before the goods are loaded onto the vessel, it is a pre-shipment cost at the port of shipment. According to FOB logic, it should be borne by the seller.
2) Telex Release Fee
Telex release is an operation where the seller (shipper) requests the shipping company to replace the original bill of lading with an electronic release instruction.
Although this facilitates the buyer’s pickup of goods at the destination port, it is essentially a document processing fee incurred at the port of shipment. As part of the seller’s fulfillment of their delivery obligation to provide transport documents (even in electronic form), this fee is typically paid by the seller.
3. Why Is It Reasonable for the Seller to Pay These Fees?
1. Principle of Cost Incurrence Location
Both fees are incurred at the port of shipment. Under FOB terms, local charges at the port of shipment (such as documentation fees, terminal handling charges, customs clearance fees, booking fees, and telex release fees) are generally the seller’s responsibility.
2. Direct Relevance to Delivery Obligations
The seller is obligated to complete the loading of goods and provide the corresponding transport documents. Booking is a prerequisite for loading, and telex release is a method of providing documents. Therefore, the associated fees are part of fulfilling the seller’s responsibilities.
3. Commercial Practice Convention
In practice, most transactions following FOB terms include these fees in the seller’s cost package for port of shipment charges. This has become an widely accepted industry norm.
Conclusion
In FOB trade, the seller’s responsibility for the booking fee and telex release fee is a reasonable practice based on international trade term interpretation rules, the stage at which costs are incurred, and industry conventions.