Freight Prepaid
Freight Prepaid is a shipping term that indicates the shipper has paid all freight charges before the cargo is dispatched. Instead of the consignee settling costs at the destination, the shipper covers transportation charges upfront. This ensures that the shipment moves without payment delays and that carriers have confirmed compensation before handling the cargo. It also reflects the agreed cost responsibilities outlined in the sales or trade contract.
Under this arrangement, the freight invoice is issued to the shipper, and the carrier records the shipment as “prepaid” on the Bill of Lading or Air Waybill. This gives the consignee a smooth receiving experience since no freight payment is required on arrival. It also avoids potential disputes if the consignee refuses to pay charges at the destination. Clear documentation keeps the process transparent.
Freight Prepaid is commonly used when the seller manages the main transportation or when the trade terms require the shipper to handle freight costs. It also supports business relationships where shippers prefer to maintain control over routing, carrier selection, or transit arrangements. Prepaying charges can secure better rates and ensure timely cargo movement.
Overall, Freight Prepaid strengthens clarity and reduces risk in international shipments. It ensures carriers receive payment early, simplifies destination procedures, and aligns with terms where the shipper maintains cost responsibility. When handled correctly, it keeps shipments moving smoothly without financial interruptions.
Frequently Asked Questions about Freight Prepaid
Clear answers to the most common questions people have when learning about Freight Prepaid.
The shipper pays all transportation charges before the cargo is dispatched, removing the consignee’s responsibility for freight costs.
It ensures smooth cargo release at the destination, avoids payment disputes, and allows the shipper to control transport arrangements.
It appears as a notation on the Bill of Lading or Air Waybill, confirming that all freight charges have already been settled by the shipper.