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Freight Forwarding Agreement
I need a freight forwarding agreement for a Hong Kong-based company that outlines the terms for shipping goods internationally, including responsibilities for customs clearance, insurance coverage, and liability for loss or damage. The agreement should specify payment terms, delivery timelines, and include a clause for dispute resolution under Hong Kong law.
What is a Freight Forwarding Agreement?
A Freight Forwarding Agreement spells out the terms between a company and its freight forwarder for moving goods internationally. In Hong Kong's bustling trade environment, these agreements set clear responsibilities for handling customs clearance, documentation, warehousing, and transportation logistics.
The agreement typically covers key elements required under Hong Kong's Trading Ordinance, including liability limits, insurance requirements, and payment terms. It protects both parties by clearly defining service scope, cargo handling procedures, and dispute resolution methods - essential safeguards in Asia's largest logistics hub where millions of shipments move through annually.
When should you use a Freight Forwarding Agreement?
Use a Freight Forwarding Agreement when your business needs to move goods internationally through Hong Kong's ports or airports. This becomes essential once you're handling regular shipments, working with multiple suppliers, or managing complex supply chains that require specialized logistics support.
The agreement becomes particularly important before starting new trade relationships, expanding into new markets, or when shipping high-value or sensitive cargo. Hong Kong customs regulations and cargo liability rules make this document vital for protecting your interests, especially when coordinating between mainland China and international destinations.
What are the different types of Freight Forwarding Agreement?
- Standard Contract: The most common type for routine freight services, covering basic customs clearance, documentation, and transport arrangements in Hong Kong.
- Comprehensive Agreement: Includes extended services like warehousing, packaging, and distribution, typically used by larger businesses with complex logistics needs.
- Project-Specific Contract: Tailored for one-time or specialized shipments, such as oversized cargo or dangerous goods requiring special handling.
- Multi-Modal Agreement: Specifically designed for shipments using different transport methods through Hong Kong's various ports and terminals.
Who should typically use a Freight Forwarding Agreement?
- Freight Forwarders: Licensed logistics companies in Hong Kong that arrange international shipments, handle customs documentation, and coordinate transportation services.
- Importers/Exporters: Businesses shipping goods through Hong Kong who need reliable logistics support and clear service terms.
- Legal Counsel: In-house or external lawyers who review and customize these agreements to protect their clients' interests.
- Customs Brokers: Licensed professionals who handle customs clearance and ensure compliance with Hong Kong trade regulations.
- Insurance Providers: Companies offering cargo insurance and reviewing liability terms within the agreements.
How do you write a Freight Forwarding Agreement?
- Shipment Details: Compile specific information about cargo types, volumes, routes, and required handling procedures.
- Service Scope: List all required services including transportation modes, customs clearance, warehousing, and special handling needs.
- Company Information: Gather complete legal names, registration numbers, and contact details for all parties involved.
- Insurance Requirements: Determine coverage needs based on cargo value and Hong Kong shipping regulations.
- Payment Terms: Define rates, additional charges, payment schedules, and currency specifications.
- Compliance Check: Review current Hong Kong customs regulations and international shipping requirements.
What should be included in a Freight Forwarding Agreement?
- Party Details: Full legal names, business registration numbers, and authorized representatives of both freight forwarder and client.
- Service Scope: Detailed description of logistics services, including customs clearance, transportation modes, and handling specifications.
- Liability Terms: Clear limits of liability under Hong Kong law, including force majeure and cargo damage provisions.
- Payment Structure: Comprehensive fee schedule, payment terms, and currency specifications.
- Duration & Termination: Contract period, renewal conditions, and termination procedures.
- Dispute Resolution: Choice of Hong Kong law, jurisdiction specifications, and arbitration procedures.
What's the difference between a Freight Forwarding Agreement and an Agency Agreement?
A Freight Forwarding Agreement differs significantly from an Agency Agreement in several key aspects, though both involve representing another party's interests in business transactions. Let's explore the main differences:
- Scope of Services: Freight forwarding focuses specifically on logistics and cargo movement, while agency agreements cover broader business representation and authority to act on behalf of the principal.
- Legal Authority: Freight forwarders act as service providers rather than legal agents, with limited authority to bind their clients in transactions beyond shipping arrangements.
- Liability Structure: Freight forwarding agreements typically limit liability to cargo value and specific logistics events, while agency agreements often involve broader fiduciary responsibilities.
- Duration: Freight forwarding agreements often cover specific shipments or periods, whereas agency agreements tend to establish longer-term business relationships.
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