Freight Collect refers to the case where the importer pays the freight at the destination of the cargo when importing under FOB conditions. When a shipment is arranged on a freight collect basis, the carrier will bill the consignee for the transportation charges upon delivery of the goods. The consignee will be responsible for paying the carrier directly, either in cash or by using a credit account established with the carrier. The carrier is not responsible for releasing the goods until the freight charges have been paid. Freight collect can be beneficial for both the shipper and the consignee. For the shipper, it can help to avoid the risk of non-payment or late payment by the consignee. For the consignee, it can provide more flexibility and control over the transportation costs, as they can negotiate better rates and payment terms with the carrier.
Source : ChatGPT