Freight Terms

FREIGHT TERMs

There are two components to freight terms:

Ownership
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 vendors 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 Techs 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 Techs invoice
Same
FOB Destination

Collect
Same
Tech pays shipping costs directly to the carrier
Same

As of December 2000