Freight terms state how transport costs, responsibilities, risk and delivery obligations are allocated between trading parties. They may refer to Incoterms rules, carrier payment terms or wording used in a quotation.
What should freight terms clarify?
They should identify origin and destination points, payer, mode, service level, included charges, risk-transfer basis, customs responsibility and delivery evidence.
Are freight terms the same as Incoterms?
No. Incoterms allocate specified seller and buyer responsibilities in the sale contract. Carrier terms govern transport service. Both may apply to one shipment.
Prepaid versus collect
Prepaid usually means the shipper pays the carrier. Collect usually means the consignee pays. These labels do not by themselves determine ownership or risk transfer.
How should costs be compared?
Use the same route, cargo, cut-offs and inclusions. Identify origin, main freight, destination and exception charges separately.
What should be recorded?
Keep the exact wording, named places, version, quotation, rate validity, exclusions and approved changes with the order.
