Logistics invoices: who pays the freight and what the bank checks

The goods are paid for, shipped and on their way. But the deal has a second line of costs: freight, forwarding services, port charges, storage. Some of these invoices are issued by foreign companies in foreign currency, and paying them can be no easier than paying for the goods themselves. And until the freight is paid, the cargo stays where it is.

Who pays for carriage

The answer lies in the Incoterms delivery basis in the contract with the supplier.

• EXW, FCA, FOB. The buyer pays for the main carriage. The buyer hires the carrier or forwarder.
• CFR, CIF, CPT, CIP. The seller pays for carriage to the destination, and its cost is built into the price of the goods.
• DAP, DPU, DDP. The seller delivers the goods to the named place. Under DAP and DPU, import customs clearance remains with the buyer.

Even under CIF, the buyer still has costs at the port of destination: unloading, terminal handling, storage, delivery within Russia. These invoices often come from foreign companies or their agents.

Incoterms do not say who pays for container detention beyond the free days. That is decided by the contract with the carrier and by how quickly the cargo was taken out of the port. In practice, the buyer almost always receives these invoices, so the free days are worth agreeing at booking, not after arrival.

Who gets paid and for what

• The shipping line or its agent. Freight under the bill of lading and the line’s charges.
• The forwarder in the country of departure. Pickup from the supplier, consolidation, export clearance, loading.
• The forwarder or carrier in Russia. Delivery from the port or border, terminal handling.
• Additional charges. Container use beyond the free period, storage, inspection.

If a Russian company issues the invoice in roubles, it is an ordinary domestic payment. If a foreign company issues it in foreign currency, it is a payment to a non-resident, and currency control rules apply.

An intermediate option: a Russian forwarder issues an invoice in foreign currency but takes payment in roubles at the rate on the payment date. For you, this is a settlement between residents, and there is no currency control on it. But the forwarder pays the foreign line itself and builds in its own conversion cost. Compare the total in roubles with paying the carrier directly.

Documents for the payment and for the bank

For a payment to a foreign carrier or forwarder, the bank expects:

• a contract of carriage or a freight forwarding agreement, or another document showing the parties and the service;
• the carrier’s invoice with the route and the container or shipment number;
• a transport document: bill of lading, CMR, railway consignment note or air waybill;
• after execution: a completion certificate or another document confirming that the service was provided.

Carriage is a service, not goods. So for currency control you submit documents confirming the services, not customs declaration data. If the contract with the carrier is large and the amount is above the threshold, it is registered with the bank in the same way as a contract for goods. Forwarders are often engaged under a framework agreement with no total amount, with payment per request. Whether such an agreement needs to be registered, check with your bank’s currency control officer before the first payment.

Amounts and details must match: the beneficiary on the invoice is the same as in the agreement, and the payment amount does not exceed the invoice amount.

Why paying freight is harder than it looks

• Timing. The line issues the bill of lading or releases the cargo once the freight is paid. Each day of delay adds storage and container charges.
• Mutual demands. The carrier waits for the money before releasing the documents. Your bank waits for the documents before processing the payment. There is only one way out: get the invoice and copies of the transport documents in advance, while the cargo is still in transit.
• Many small invoices. Freight, local charges and container charges arrive as separate invoices at different times. Each needs a document and a payment.
• The beneficiary’s bank. The banks of some carriers do not accept payments from Russian companies or from certain jurisdictions.
• Currency. Invoices are issued in dollars, yuan, dirhams and euros. Conversion costs differ from channel to channel, and the difference shows only in the final amount in roubles.

How to pay without the cargo standing idle

1. Find out in advance who will issue the invoice, in which currency and to which bank details.
2. Check whether your usual payment route works for this country and this beneficiary bank.
3. If it does not, set up payment through an agent before the cargo arrives, not on the day the vessel comes in.
4. Agree with the carrier whether invoices from the same beneficiary can be combined into one payment. Fewer payments mean fewer documents and fees.
5. Keep the set of documents for each payment together: agreement, invoice, transport document, payment confirmation. The bank will need it.

Sometimes the carrier’s bank accepts a payment only from a particular payer. In that case the agent may engage a sub-agent, but only with the client’s consent.

What a broker adds when paying for logistics

VEDmost selects an agent from its pool to match the carrier’s country and currency. Before the roubles are debited, the execution term is set in the agency agreement, and the rate and fee in the payment order. On request, the roubles wait for execution in a special escrow account at a Russian bank, for an additional fee. After the payment you receive the transfer confirmation and the agent’s report and completion certificate for your bank. The client does not pay VEDmost separately: the broker’s fee is paid by the executing agent.

More on the Freight payments page. If you already pay carriers through an agent, name your rate on the Compare your rate page, and we’ll look for a lower rate in our pool.