Freight Collect / Freight Prepaid
These terms show who pays the main freight and where. “Freight prepaid” means it is paid at origin, usually by the shipper. “Freight collect” means it is paid at destination, usually by the consignee.
In plain words
The choice usually follows the Incoterms rule. Under CFR, CIF, CPT, CIP, DAP, and DDP, the seller pays the main freight, so it is normally prepaid. Under EXW, FCA, and FOB, the buyer pays it, so it is often collect, or the buyer's forwarder pays it at origin.
The Bill of Lading or air waybill shows “Freight Prepaid” or “Freight Collect”. With freight collect, the carrier releases the cargo only after the consignee pays. Some carriers and countries do not allow freight collect on some routes, so check before you book.
Example from real shipping
An exporter in Istanbul sells on CFR terms to a buyer in Spain. The exporter pays the ocean freight in Istanbul, and the B/L says “Freight Prepaid”. On another order, the buyer chooses FOB. The buyer's forwarder books the ship, the B/L says “Freight Collect”, and the buyer pays the freight before the cargo is released in Valencia.
Related terms
- B/LA Bill of Lading (B/L) is the main document for sea freight. The carrier issues it when it takes the goods. It shows who can collect the goods at the destination.
- FOBUnder FOB (Incoterms® 2020), the seller clears the goods for export and loads them on board the ship chosen by the buyer, at the named port of shipment. The risk passes to the buyer when the goods are on board.
- CFRUnder CFR (Incoterms® 2020), the seller pays the sea freight to the named port of destination. But the risk passes to the buyer earlier, when the goods are loaded on the ship at the port of shipment.
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Request a QuoteThis glossary is general information, not legal or customs advice. Rules, fees, and practice can differ by carrier, port, and country.