Freight Prepaid

Freight Prepaid is a common term in international trade and ocean shipping, meaning that the freight charges are paid in advance by the shipper (usually the seller or exporter) to the carrier before the goods are loaded on board. This term is commonly used in trade terms such as CIF and CFR, where the seller is responsible for arranging transportation and paying the freight. Usage scenario: When the buyer and seller agree that the freight is borne by the shipper, the bill of lading will be marked 'Freight Prepaid'. Note: Freight prepaid does not mean the seller ultimately bears the cost; it may have been included in the goods price. It is the opposite of 'Freight Collect', where the consignee pays at the destination port. Difference: Under freight prepaid, the carrier receives the freight upon loading, resulting in lower risk; under freight collect, the carrier bears the risk of the consignee refusing to pay. In addition, in letter of credit transactions, banks usually require the bill of lading to show 'Freight Prepaid' to comply with the L/C terms. Foreign trade practitioners need to choose accurately based on trade terms and contract agreements to avoid discrepancies in documents or extra costs due to inconsistent freight payment methods.