Introduction

If you’ve seen an international shipping invoice, you may have noticed terms like Freight Prepaid or Freight Collect. Understanding them is essential to avoid confusion or unexpected charges.

What Is Freight Prepaid?

• The exporter (shipper) pays for the freight charges at the origin.
• Common in FOB, CFR, CIF
• Advantages:
  • Shipper controls the shipping cost.
  • Importer receives cargo with no freight payment at destination.

What Is Freight Collect?

• The importer (consignee) pays freight charges at the destination.
• Common in EXW, FCA
• Advantages:
  • Importer has control over cost and carrier selection.
  • Useful when the buyer has better rates with a forwarder.

Why Does It Matter?

• Misunderstanding can cause disputes or shipment delays.
• Both parties must clearly state payment terms in the sales contract.

Conclusion

Freight Prepaid and Freight Collect define who pays and when. Clear communication helps avoid hidden costs.