Collect Shipping
Also known as: Collect, Freight Collect, Receiver Pays
Definition
Collect shipping places the freight payment responsibility on the receiver. The shipment moves without the sender paying, and the recipient either pays on delivery or has charges billed to their carrier account.
How Collect Shipping Works
- Shipper creates shipment marked “collect”
- Carrier picks up goods
- Receiver’s account number provided
- Freight charges billed to receiver
- Receiver pays carrier directly
Collect vs. COD
| Collect | COD |
|---|---|
| Shipping charges only | Merchandise + shipping |
| Billed to account | Paid at door |
| No exchange at delivery | Driver collects payment |
| Common in B2B | Common in B2C |
When to Use Collect
- Customer has better carrier rates
- Contract terms specify collect
- Large receivers with volume discounts
- Buyer controls carrier relationship
- Inbound freight programs
Requirements for Collect
- Receiver must have carrier account
- Account must be in good standing
- Proper account number on shipping label
- Receiver authorization
Considerations
Risks for shipper:
- Less control over shipping costs
- Receiver’s account issues can delay delivery
Benefits for receiver:
- Use negotiated rates
- Control carrier selection
- Consolidated billing
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