Freight Prepaid and Freight Collect
Two ways to pay ocean or air freight: paid by the shipper at origin, or paid by the consignee at destination.
TL;DR: Freight prepaid means the shipper pays the main freight charge at origin. Freight collect means the consignee pays it at destination before the cargo is released.
The payment term is marked on the bill of lading or air waybill as “freight prepaid” or “freight collect.” It usually follows the Incoterm in the sales contract. Under CIF, CFR, DAP or DDP, the seller arranges and pays the main freight, so the bill of lading is normally freight prepaid. Under FOB or EXW, the buyer is responsible for the main freight, so it is often freight collect, although the buyer’s forwarder may also collect it through their own invoice.
These terms cover the main carriage only. Local charges such as destination THC, documentation fees and customs costs are usually billed separately at destination, even when freight is prepaid. Ask for a clear list of what the buyer will pay on arrival.
Freight collect is not accepted on every route. Some countries or carriers restrict it, and some forwarders require credit approval first. Confirm this before shipping.
For buyers, freight collect paired with FOB gives more control over routing and costs, since your own forwarder handles the booking. Freight prepaid under CIF is simpler to arrange, but check what the seller’s freight covers. See FOB, CIF and Bill of Lading.