Freight Collect means transportation charges may include pickup and / or delivery and are entered on the airway bill to be collected from the consigned (freight payable at destination by the consignee when the goods are delivered). Equivalent terms are 'Freight collect' or 'charges forward'.
The INCOTERMS (International Commercial Terms) determine whether the shipper or the consignee is responsible for paying the freight. Freight collect means that the freight still has to be paid by the consignee. The trade terms EXW and FCA require a collection of the cost of the main carriage.
In a collect delivery, the letter of credit (L/C) normally requires that the words 'Freight Collect' be marked on Airway Bill, clearly indicating freight payable at destination. The mark may appear by stamp or be indicated by other means.
A collection charge usually is included in the freight rate or is collected separately. Hence, the freight charges on a collect basis is normally higher than on a prepaid basis.
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