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Tractor Transporting Discussion Forum

Re: Best Practices for choosing a hauler

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Author  [Modern View]
willie in mn

06-27-2011 01:49:18

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I'm being a bit nit-picky here, but will try to clear up one item. Spent my whole working career in transport business, private, contract,& common carrier. Rather long, & seems confusing, but read it slowly, absorb each paragraph before moving on to the next one. There is a big difference between C O D & Freight Collect shipments. Way more than 1/2 of people get them confused, customers & carriers alike.

C O D- this is the price of the item being shipped. It has nothing to do with transportation costs. This amount is collected by the driver when arriving at delivery point, before unloading. According to ICC (now DOT) rules, it must be cold green cash or certified check made payable to the shipper, unless the shipper notes & signs the original bill of lading that customer check is acceptable. The carrier remits this payment directly to the shipper. A small fee of around 1% is added to the freight charges to cover handling the money. C O D shipments can be either freight collect or freight prepaid. If freight collect, driver gets two seperate payments. One made to the shipper for price of the merchandise, other to the carrier for transportation costs.
It is used in case the shipper has doubts that the reciever will actually send payment for the items sold, or the reciever doubts that the shipper will actually send what he has already paid for.

Freight Collect- this designates that the reciever pays the transportation costs, including any money handling fees for a C O D shipment.

Freight Prepaid- this designates that the shipper pays the transportation costs. On the standard bill of lading, there is a box on the right side in the fine print that reads "If freight is to be prepaid write or stamp here'TO BE PREPAID'_________". If this blank line is empty, the freight charges are automatically Collect. In case of dispute, this box rules legally, no matter if someone writes "prepaid" anywhere else on the bill of lading. On large sales the shipper will often absorb the frieght costs, on smaller sales shipper will add freight costs to the sale price of the merchandise

Freight Allowed- this is a collect shipment, reciever pays the freight, but deducts the freight costs when he pays the seller for the merchandise. It is at the carrier's option to demand immediate payment or to extend 7-30 days credit, either from the shipper when loading a prepaid shipment, or from the reciever for a collect shipment.
Exception- household goods carriers (bed buggers) by law must be paid before unloading.
I know, clear as mud, but it covers the ground.

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