The term freight used here refers to transportation charges. The INCOTERMS (International Commercial Terms) determine whether the shipper or the consignee is responsible for paying the freight.
Freight Collect
Freight collect means that the freight still has to be paid by the consignee. The trade terms FOB, FAS, 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 the bill of lading, 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 charged on a collect basis is normally higher than on a prepaid basis.
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