Freight Collect
Freight Collect is a payment term indicating that the consignee, the receiver of the goods, pays the freight charges when the shipment arrives. Instead of the shipper covering transportation costs upfront, the charges are settled at the destination. This arrangement shifts financial responsibility to the party receiving the cargo. It is commonly used when the buyer controls shipping decisions or prefers to handle costs directly.
Under Freight Collect, carriers or logistics providers invoice the consignee upon delivery. The consignee must pay the charges before the goods are released. This approach helps shippers improve cash flow by avoiding advance payments. It also ensures that the paying party is the one benefiting from the cargo. Clear communication between the shipper and the consignee is essential to avoid misunderstandings.
This term is often linked to trade agreements or purchase contracts where buyers take responsibility for shipping arrangements. It simplifies cost allocation, but the consignee must be prepared for destination fees and handling charges. If the consignee fails to pay, carriers may hold the cargo or delay release. Proper documentation ensures smooth processing and avoids disputes.
Overall, Freight Collect provides a simple way to assign freight costs to the receiver of the shipment. It strengthens cost transparency and aligns payment with delivery. When both parties agree beforehand, it supports efficient cargo movement and clear financial responsibility.
Frequently Asked Questions about Freight Collect
Clear answers to the most common questions people have when learning about Freight Collect.
The consignee pays all freight charges at the destination before the goods are released by the carrier.
It shifts financial responsibility to the buyer, improves cash flow for the shipper, and aligns payment with the party receiving the cargo.
The carrier may hold the cargo, delay release, or take legal steps, since the freight must be settled before delivery.