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Freight Forwarding Agreement
I need a freight forwarding agreement that outlines the responsibilities and liabilities of both parties, includes terms for handling customs clearance, and specifies the process for dispute resolution. The agreement should also cover insurance requirements and detail the payment terms for services rendered.
What is a Freight Forwarding Agreement?
A Freight Forwarding Agreement sets up the legal relationship between a company and its freight forwarder who handles the movement of goods across borders. Under German law (particularly the HGB - German Commercial Code), this contract specifies how the forwarder will organize transportation, handle customs, and manage logistics on behalf of their client.
These agreements are essential in German international trade, outlining key responsibilities like cargo insurance, documentation requirements, and liability limits. The contract protects both parties by clearly defining service levels, payment terms, and specific obligations under German transportation law - including the forwarder's duty to choose reliable carriers and secure the best routes for shipments.
When should you use a Freight Forwarding Agreement?
Use a Freight Forwarding Agreement when your business needs to ship goods internationally through Germany or across EU borders. This contract becomes crucial as soon as you start working with a logistics partner who will handle customs clearance, transportation arrangements, and warehousing on your behalf.
The agreement proves especially valuable for complex supply chains involving multiple carriers or special handling requirements. German businesses often implement these agreements before their first shipment, or when scaling up international operations. Having this contract in place protects against liability issues, defines service expectations, and ensures compliance with German transportation laws and EU regulations.
What are the different types of Freight Forwarding Agreement?
- Standard Multi-Modal Agreement: Covers various transportation methods across air, sea, and land - ideal for complex supply chains requiring flexibility in shipping modes
- Direct Forwarding Contract: Focuses on point-to-point shipments with a single carrier, offering simplified terms and streamlined documentation
- Comprehensive Logistics Agreement: Includes additional services like warehousing, packaging, and inventory management alongside basic forwarding duties
- Project-Specific Agreement: Tailored for one-time or specialized shipments, such as oversized cargo or dangerous goods requiring special handling
- Framework Forwarding Agreement: Establishes long-term partnership terms while allowing for specific shipping details through supplementary booking notes
Who should typically use a Freight Forwarding Agreement?
- Freight Forwarders: German logistics companies who organize transport, handle customs clearance, and manage shipping documentation
- Export Companies: Manufacturers and traders who need their goods shipped internationally through professional forwarding services
- Legal Departments: Corporate lawyers who draft and review agreements to ensure compliance with German transportation laws
- Customs Authorities: Officials who rely on these agreements to verify shipping responsibilities and documentation
- Insurance Providers: Companies offering cargo insurance and requiring clear definition of liability between parties
How do you write a Freight Forwarding Agreement?
- Service Scope: Define exact transportation routes, modes of transport, and any additional services like warehousing or packaging
- Company Details: Gather full legal names, registration numbers, and addresses of both parties under German law
- Liability Terms: Specify insurance requirements, damage limits, and risk allocation according to HGB regulations
- Payment Structure: Document rates, payment terms, currency, and any additional fees for special handling
- Compliance Requirements: List necessary permits, customs documentation, and specific handling requirements for your cargo type
- Performance Metrics: Define delivery timeframes, reporting requirements, and quality standards for service evaluation
What should be included in a Freight Forwarding Agreement?
- Party Information: Complete legal names, addresses, and registration details of forwarder and client as per German Commercial Code
- Service Description: Detailed scope of forwarding services, transport modes, and specific handling requirements
- Liability Provisions: Clear terms following HGB sections 407-475 on freight forwarder responsibilities and limitations
- Payment Terms: Fixed rates, additional charges, payment schedules, and currency specifications
- Insurance Requirements: Mandatory coverage types and minimum insurance amounts under German law
- Duration and Termination: Contract period, notice requirements, and conditions for early termination
- Dispute Resolution: Jurisdiction clause specifying German courts and applicable German transport laws
What's the difference between a Freight Forwarding Agreement and an Agency Agreement?
A Freight Forwarding Agreement differs significantly from an Agency Agreement. While both involve representation of business interests, their scope and legal implications under German law are quite distinct.
- Service Scope: Freight forwarders handle specific logistics tasks like shipping and customs clearance, while agents can represent companies across various business activities
- Legal Framework: Freight forwarding is governed by specialized sections of the HGB (German Commercial Code) for transport law, while agency relationships fall under general commercial agency regulations
- Liability Structure: Freight forwarders have specific liability limits for cargo damage or loss, whereas agents face different liability standards for business representation
- Duration: Freight forwarding typically covers specific shipments or periods, while agency agreements often establish longer-term business relationships
- Compensation Model: Freight forwarders charge per service or shipment, while agents usually earn commissions on business generated
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