GlossaryEN1 min readUpdated: Jun 18, 2026
foreign freight costs
When a shipment crosses a border, foreign freight costs come into play: these are the charges levied for the international carriage of goods, covering all modes of transport – ocean, air, rail, and road.
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Incoterms 2020 Simulator: Who bears costs & risk?
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Definition & Explanation
When a shipment crosses a border, foreign freight costs come into play: these are the charges levied for the international carriage of goods, covering all modes of transport – ocean, air, rail, and road. Pricing depends on the route, chargeable weight or volume, and the terms negotiated with the carrier. The allocation of freight costs between seller and buyer is governed by the agreed Incoterm; under CFR or CIF, the seller covers the main carriage, while under EXW or FCA that responsibility shifts to the buyer. Surcharges such as BAF, CAF, or security fees are commonly added on top of the base rate. For customs valuation purposes, freight costs to the point of entry are generally included in the customs value, directly affecting the duty base.
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