What is the difference between freight prepaid and freight collect?

Prepaid: the shipper pays the carrier, when the shipment is tendered. Collect: the consignee pays, usually when it receives the goods.

What is Section 7 on a bill of lading?

The non-recourse clause. If the consignor signs it, the carrier may not deliver without payment of the freight and cannot then bill the consignor; if it is unsigned, the consignor stays liable for the charges.

Does FedEx Freight still offer collect on delivery?

Not its COD service, which ended on 6 January 2025. Collect freight — the consignee paying the freight charges — is a different thing and still exists in its rules.

Term

Freight prepaid and freight collect

Freight prepaid means the shipper pays the carrier; freight collect means the consignee pays, usually on delivery. FedEx Freight's rules make prepaid charges due from the consignor when the shipment is tendered and collect charges due from the consignee when it is received. The terms decide who the carrier bills — not who owns the goods.

Also called freight prepaid, freight collect, prepaid freight, collect freight, charges collect, Section 7 non-recourseUpdated 13 October 2026

Who pays, and when

	Prepaid	Collect
Who pays	Shipper (consignor)	Consignee
When — FedEx Freight	When the shipment is tendered	When the shipment is received
Air — Etihad Cargo	Charges paid at origin	'Charges collect' entered on the air waybill, recollected from the consignee against delivery
If the consignee doesn't pay	Not applicable	The shipper usually remains liable — see Section 7

Section 7: when the shipper stays liable

On the uniform straight bill of lading, a consignor that wants delivery made without recourse on itself signs the statement 'The carrier shall not make delivery of this shipment without payment of freight and all other lawful charges.' If it doesn't sign, the consignor remains liable for the freight. Ocean and air terms say the same in their own words: Maersk's terms keep the merchant responsible, and Etihad Cargo's make the shipper guarantee payment of unpaid charges collect. FedEx Freight will not switch a shipment from prepaid to collect once Section 7 of the corrected bill has been signed.

Worked example: an unpaid collect shipment

LTL shipment billed collect, $640 · consignee refuses to pay · Section 7 unsigned → carrier bills the shipper $640 · Section 7 signed → carrier cannot deliver without payment, so it holds the goods

The $640 is illustrative; the liability follows the bill of lading terms in 49 CFR 1035 and FedEx Freight's rules tariff. On ocean freight, changing the payer after invoicing has its own cost: Maersk charges $60 a request in Mexico from 4 April 2026.

The mistake people make

Leaving the box empty. FedEx Freight's rules say that shipments not marked collect move as prepaid — so a supplier that forgot to tick 'collect' gets the freight bill. Prepaid and collect also say nothing about who owns the goods or carries the risk: that is the sale contract's Incoterms rule, which governs who must contract for carriage.

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