Freight Allowed: What It Means on a Medical or Lab Purchase Order

Short answer: “Freight allowed” is purchase-order wording, not an Incoterm and not a term defined in the Uniform Commercial Code. It normally appears in the phrase “FOB Destination, Freight Prepaid and Allowed”, which one university procurement office reads as the seller assuming risk of loss until delivery and paying for transportation and insurance. Because the wording varies between buyers, the purchase order itself governs.

General procurement information for lab and clinic buyers. It is not legal advice, and it says nothing about prices, carriers or delivery times.

What is freight allowed?

The phrase comes from the shipping line of a purchase order. In the form published by the University of Wisconsin-Milwaukee (UWM) procurement office, “FOB Destination, Freight Prepaid and Allowed” means the seller assumes risk of loss up to delivery to the university, and the seller pays for transportation and insurance. UWM adds that its accounts payable office will not pay a freight charge under this term (UWM Ordering and Purchasing Tips, checked 2026-11-03).

“Allowed” therefore tells the buyer that the freight cost is the seller’s to absorb. The freight is not billed on top of the goods. For a medical or laboratory order, that is the difference between an invoice that matches the quote and one carrying an unexpected transport line.

How does freight allowed work in a medical supply purchase?

Three layers sit behind the phrase, and only the first is written on the purchase order by the buyer.

1. The purchase-order term. The buyer writes or accepts “FOB Destination, Freight Prepaid and Allowed”. Whether a given seller treats that as binding depends on what was agreed, which is why the term should be on the order and not assumed.
2. The invoice. Under UWM’s reading, no freight charge is payable. A freight line on the invoice is a mismatch with the term and a reason to query before paying.
3. The legal default. The Uniform Commercial Code is the default law for US sales of goods. Section 2-319 says that, unless otherwise agreed, an F.O.B. term naming the place of destination obliges the seller to transport the goods there at its own expense and risk. Section 2-509(1)(b) adds that where the contract requires delivery at a destination, risk of loss passes to the buyer when the goods are duly tendered there while in the carrier’s possession, so the buyer can take delivery (Cornell LII, checked 2026-11-03). Neither section uses the word “freight allowed”, and each state enacts its own version, so check the version that applies to your order.

For the related risk question on shipments that are not destination-priced, see FOB terms for medical supplies and the comparison of FOB and delivered pricing in medical supply contracts.

Freight allowed vs. prepaid and added vs. collect

The UWM procurement office lists the two prepaid variants side by side. The table below reflects only what that page states; collect shipments are covered in the linked guide.

Purchase-order term	Risk of loss (UWM)	Freight on the invoice (UWM)
FOB Destination, Freight Prepaid and Allowed	Seller, until delivery to the university	Seller pays transportation and insurance; accounts payable will not pay a freight charge
FOB Destination, Freight Prepaid and Added	Seller, until delivery	University pays freight and insurance, but the seller must include the freight charges on the quote; accounts payable pays freight as invoiced

The practical reading: in both variants the seller keeps the risk until delivery, but only “allowed” leaves the freight cost with the seller. “Added” puts the cost back on the buyer, visibly and in advance on the quote. For the third option, where the buyer arranges or pays the carrier, see freight collect for medical supply shipments and freight collect vs. prepaid.

Which documents or terms go with freight allowed?

• The purchase order carries the term and is the document that decides what was agreed.
• The seller’s quote shows whether freight is included. UWM requires freight to appear on the quote under “Prepaid and Added”.
• The invoice should be checked against the term before payment.
• The receiving record. Because the seller keeps risk until delivery, a damaged or short shipment is noted at receipt. See goods receipt notes and filing a freight damage or shortage claim.
• Related terms: Incoterms are a separate international system. “Freight allowed” is not one of them.

A pre-signature checklist

This checklist is an editorial aid built from the sources above, not a rule stated by any one of them.

1. Is the full phrase on the purchase order, including “FOB Destination”, and not only “freight allowed”?
2. Does the quote show no separate freight line, as “allowed” implies?
3. Does the seller’s acknowledgement accept that wording, or change it?
4. Who is named to file any carrier claim, and where is that written?

Mistakes small buyers make with freight allowed

• Treating it as a standard term. It is a convention of purchasing forms, not a defined Incoterm or UCC term, so a seller may read it differently from a university buyer.
• Confusing “allowed” with “added”. One letter of difference on the order moves the freight cost from the seller to the buyer.
• Paying a freight line anyway. Under the UWM reading of “allowed”, a freight charge is not payable, so an invoice that includes one needs a query first.
• Assuming the default overrides the order. UCC 2-319 applies “unless otherwise agreed”, so the agreed wording comes first.

FAQ

What is freight allowed?

Purchase-order wording, usually in “FOB Destination, Freight Prepaid and Allowed”, meaning the seller bears transportation, insurance and risk of loss until delivery (UWM, checked 2026-11-03).

How does freight allowed work in a medical supply purchase?

The seller pays for shipping and is expected to show no freight charge to the buyer. Under UCC 2-509(1)(b), risk passes to the buyer when goods are duly tendered at the destination, unless the parties agreed otherwise.

Which documents or terms go with freight allowed?

The purchase order, the quote, the invoice and the receiving record, plus the FOB destination term it normally accompanies.

What mistakes do small buyers make with freight allowed?

Treating it as a defined standard, mixing it up with “freight prepaid and added”, and paying a freight line that the term says the seller absorbs.

Sources

• University of Wisconsin-Milwaukee, Ordering and Purchasing Tips, checked 2026-11-03.
• Cornell Legal Information Institute, UCC 2-319, F.O.B. and F.A.S. terms, checked 2026-11-03.
• Cornell Legal Information Institute, UCC 2-509, Risk of loss in the absence of breach, checked 2026-11-03.