Posted in Operations and Supply Chain Terms, Total Reads: 244
Definition: Freight Collect
Freight collect means that the person or company that receives goods will pay the cost of transporting the goods at the time they are received. The agent of the shipping company will collect the freight in the port of destination before the goods are made available to the holder of the original Bill of Lading.
For example, if A is transporting goods to B, then B will pay the cost of transportation of the goods. The ownership of the goods also lies with B in this case. The incoterm corresponding to freight collect is FCA.
The advantages of freight collect are mainly for the seller, because his ownership of goods ends once the goods are loaded into the ship. After that, the ownership shifts to the buyer who also inherits the risk associated with transportation such as loss/damage of goods during transportation etc.