We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Accounting

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Is a Collect Shipment?

Mary McMahon
By
Updated: May 16, 2024
Views: 31,657
Share

A collect shipment passes freight charges on to the recipient, rather than making them the responsibility of the sender. Such shipments are often sent under what are known as freight on board (FOB) terms, where the seller agrees to pay costs to move shipments to a port and onto a vessel, but the buyer is responsible for everything else. The terms of shipment are typically outlined in sale agreements and contracts to make sure every party is aware of expectations. In the event of a dispute, this documentation can help resolve the problem.

Under the terms of a collect shipment, the seller or agent is responsible for packaging cargo responsibly, in sturdy containers that will stand up to shipping, and transporting it to a shipping firm or arranging for pickup. For large shipments measured in container loads, usually the firm requires transport to a port or freight yard. A small package from a business to a customer, on the other hand, could be picked up by a driver on a delivery route.

The seller assumes the costs associated with getting the collect shipment to the shipping firm, and loading it on board, if applicable. At this point, all expenses become the responsibility of the buyer. These include the flat costs associated with shipping as well as any extra payments for insurance, taxes, duties, and various other fees that may arise. Sellers may provide buyers with estimates on these costs, or information about how to get them from the shipping company, so they know what to expect.

Terminology used in shipping is not internationally consistent. Firms may not refer to "collect shipments," instead using terms such as "freight collection" or others. Buyers and agents who are not sure about their responsibilities can request clarification and a detailed discussion of the terms being used. This allows them to determine which costs they will be liable for, so they can prepare, or negotiate, if necessary. A buyer might, for instance, ask that a seller cover shipping costs as part of a negotiation.

Once goods are delivered to the buyer and appear to be in order, the shipping firm’s net billing terms start to apply to the collect shipment. The customer has a set period of time, like 30 days, to pay the bill. If there is a problem, the buyer needs to dispute the bill and provide documentation to resolve the issue. This may include proof that a collect shipment arrived damaged or late, supporting a claim that the bill is unreasonable.

Share
SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
By anon341369 — On Jul 11, 2013

Is collect shipment similar to exworks term? Can you please clarify the difference?

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
Share
https://www.smartcapitalmind.com/what-is-a-collect-shipment.htm
Copy this link
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.