Freight Terms

As of December 2000 

There are two components to freight terms:

  1. Ownership

  2. Transportation costs 

F.O.B. is the abbreviation for Free on Board.  This means that the product will be placed on a mode of transport (carrier) without any loading costs and free of any encumbrances.

 
FRS FREIGHT TERM ABBREVIATIONS
 

Code

F.O.B. Point

Transportation Costs

DA

Destination

PPD/ADD   (Prepaid & Added)    

DC

Destination 

Collect

DP

Destination 

Prepaid

SA

Ship Point

PPD/ADD   (Prepaid & Added)

SC

Ship Point

Collect

SP

Shipping Point

PPD   (Prepaid)

OWNERSHIP DESIGNATION

Establishing ownership fixes responsibility for the product and determines who handles the claims that may result from accidents occurring before, during or after transport. 

Origin OR Shipping Point OR Factory 

Title or ownership passes to Tech at the point when the carrier accepts the product.  The point of origin or shipping point is usually the vendor’s factory or warehouse.

Destination OR Tech

Title or ownership passes to Tech when the carrier delivers the product, in good condition, to the delivery point specified on the purchase order.  

 
RESPONSIBILITY FOR TRANSPORTATION COSTS
 

Freight Prepaid & Added OR Freight Prepaid & Charged

Vendor pays the freight bill and adds that amount to their invoice. 

 Freight Prepaid OR Freight Prepaid & Allowed

Vendor pays the freight bill and DOES NOT charge back to the University. 

Freight Collect

Tech pays the freight charges directly to the carrier.

FREIGHT TERMS CHART 

Freight Terms

Ownership of Commodity

Payment of Transport Fees

Freight Claims

FOB Origin  

Prepaid & Added OR Prepaid & Charged  

 Title passes to Tech when carrier signs for product at shipping point

Vendor pays shipping costs and adds to Tech’s invoice

Tech pays vendor IN FULL and files claim with carrier to recover costs for damaged or lost merchandise.

FOB Origin  

Prepaid & Allowed  

Same

Vendor pays shipping costs.

Same

FOB Origin

Freight Collect

Same

Tech pays shipping costs directly to carrier

Same

FOB Destination

Prepaid OR Prepaid & Allowed

Title passes to Tech when product is delivered in good condition

Vendor pays shipping costs

Vendor files any freight claims and replaces damaged merchandise at no additional cost to the University.

FOB Destination

Prepaid & Added OR Prepaid & Charged

Same

Vendor pays shipping costs and adds it to Tech’s invoice

Same

FOB Destination

Collect  

Same

Tech pays shipping costs directly to the carrier

Same

  
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