Direct comparison
Freight Collect vs Prepaid: Who Pays the Carrier
Freight collect vs prepaid: who the carrier bills, when it releases cargo, and what neither term decides. Statute-backed table for lab and clinic receiving.
Written and maintained by CASRAI Editorial Board
Last updated
How do Freight prepaid and Freight collect compare side by side?
The table below compares Freight prepaid and Freight collect across 10 dimensions, from who the carrier bills to when each fits.
Side-by-side comparison
| Dimension | Freight prepaid | Freight collect |
|---|---|---|
| Who the carrier bills | The shipper (consignor) pays the carrier for the transportation. This is trade usage rather than a defined legal term. | The consignee pays the carrier for the transportation on or after delivery. This is trade usage rather than a defined legal term. |
| Carrier release at destination | Payment is expected to be settled by the shipper, so the receiver is normally not asked to pay the freight bill at the dock. | Under 49 U.S.C. 13707 a carrier gives up possession at destination only when payment is made, unless Secretary regulations allow release before payment (for motor carriage, weekly or monthly payment may be allowed). |
| If the consignee is only an agent | Not the usual question, because the shipper is the billed party. | Under 49 U.S.C. 13706 an agent consignee without beneficial title is liable for rates billed at delivery. It is not liable for later-found additional rates if it gave the delivering carrier written notice, before delivery, of its agency and lack of beneficial title. |
| Wrong information about the owner | Not addressed by the term itself. | Under 49 U.S.C. 13706, a consignee that gives the carrier erroneous information about the identity of the beneficial owner is liable for the additional rates. |
| Where the term is recorded | In the carrier and shipper documents. The bill of lading contents listed in 49 CFR 373.101 (consignor and consignee, origin and destination, packages, description, weight or volume) include no payment-terms field, so the term appears in the carrier's and parties' own paperwork. | Same as prepaid: recorded in the carrier and shipper documents, not as a required field under 49 CFR 373.101 (editorial reading of the list). |
| What to match before shipping | That the purchase order freight term, the supplier's paperwork and the bill of lading all say prepaid. | That the purchase order freight term, the supplier's paperwork and the bill of lading all say collect. |
| Documented mismatch case | ITIC reported a banana shipment whose bill of lading was reissued six times: the first three showed freight prepaid, the last three freight collect. The carrier's system still showed prepaid, cargo was released and about USD 40,000 of freight went unpaid. | In the same ITIC case the consignee was persuaded that the final freight-collect bill of lading still made it liable, and the agent accepted 95% of the freight. This was ocean carriage, so the US motor-carrier statutes above do not apply to it. |
| What it decides about title and risk | Nothing by itself. Title and risk of loss follow the sale terms, such as Incoterms or FOB, not the freight-payment term. | Nothing by itself. A buyer paying freight collect does not by that fact bear risk of loss; the sale terms decide that. |
| Related term | "Freight prepaid" is the same arrangement as prepaid freight: the shipper settles the carrier's charge. | "Freight collect" is also called collect freight: the carrier's charge is collected from the consignee. |
| When each fits | When the agreed sale terms put the carrier charge with the supplier or shipper. | When the agreed sale terms and purchase order put the carrier charge with the buyer and the buyer is the named consignee. |
Sources
- 49 U.S.C. 13706 and 13707 and 49 CFR 373.101 (Cornell LII, read 2026-11-03)
- ITIC Claims Review "A question of freight - who pays?" (read 2026-11-03)
- Same sources. Payment-term meanings are trade usage and the matching advice is editorial interpretation
Ask CASRAI · free to try
Ask about Freight Collect vs Prepaid: Who Pays the Carrier
Ask your first 2 questions free below. Subscribers get 150 a day for $29 a month.
An AI assistant specialized in research administration. It cites the sources behind every answer, labels web answers and says when it can't answer.
Answers draw on CASRAI's guides and dictionary plus the federal and funder documents we index: Federal Register, Grants.gov, Regulations.gov and UKRI.
Works on this site and inside Claude, Cursor and the AI tools you already use.
Everything CASRAI publishes — this page, the dictionary, the guides and the news — stays free to read, with no account and no card.
Common questions
Common questions about Freight prepaid vs Freight collect
What does freight prepaid mean?
+
Freight prepaid is trade usage for an arrangement where the shipper, not the receiver, pays the carrier for the transportation. It describes who the carrier bills; it does not by itself say who owns the goods or bears risk of loss.
Does freight collect mean the buyer bears the risk?
+
No. Freight collect says the consignee is billed by the carrier. Title and risk of loss follow the sale terms, such as Incoterms or FOB, which is why a freight term should be read together with them.
