What Does “Freight Collect” And “Freight Prepaid” Mean in a Bill of Lading?

Various types of transport documents used in international trade.

Bill of lading is a transport document which is used in sea shipments.

A bill of lading is not only a receipt for the delivery of goods, but also contains a contract of carriage.

In traditional form it is also a document of title. Bill of lading as a transport document proves that:
  • the consignor delivers the merchandise to the carrier in good order. 
  • the terms of the carriage is accepted by carrier as indicated on the face of the document. 
  • in a traditional form (negotiable bill of lading) consignor can pass title of goods to another party by means of endorsement or delivery. 
In addition to these information, bill of lading indicates by whose party the freight charges will be payable. “Freight Collect” and “Freight Prepaid” are the terms used in this regard.

What is “Freight Collect”?

When stated on a bill of lading or any other transport document, freight collect indicates that the freight will be payable by the importer.

What is “Freight Prepaid”?
When stated on a bill of lading or any other transport document, freight prepaid indicates that the freight will be payable by the exporter.

How “Freight Collect” and “Freight Prepaid” included on the bill of lading?

Both terms are generally written under the description of goods parts on a bill of lading as shown bellows.

Figure 1  : Freight Prepaid on a Bill of Lading
Freight Prepaid on a Bill of Lading
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