Freight Collect

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What is Freight Collect?

Freight collect is a shipping arrangement where the consignee is responsible for paying freight charges and related transport costs on arrival or under agreed credit terms. Clear alignment between shipper, consignee, and carrier helps prevent delivery delays and billing disputes.

The shipper books the shipment on collect terms, and the carrier invoices the consignee at destination. If charges are not settled as agreed, delivery may be withheld or additional costs such as detention or demurrage can apply, depending on the tariff and contract.

Freight collect is commonly used between established trading partners or when the buyer prefers to control transport payments directly. Confirming credit terms and documentation in advance helps avoid payment-related disruption.

Freight Collect vs. Prepaid

Freight charges can be paid either by the shipper or the consignee, and the choice affects how costs, risk, and cash flow are managed between parties. Each option affects cash flow, invoicing, and commercial responsibility.The two most common arrangements are:

  • Prepaid: Shipper pays freight before dispatch.

  • Collect: Consignee pays at destination or under agreed terms.