What the Difference Between Collect, Prepaid, and 3rd Party Freight Charges?
When it comes to LTL freight, it’s important to know the differences between Collect, Prepaid, and Third-Party freight charges because ultimately its effects who to the bill and when. Knowing and understanding the differences between these on your Bill of Lading is a useful and necessary tool in dealing with LTL freight from start to finish. Understanding these terms can also help you negotiate future contracts with carriers, to ensure you’re getting your preferred terms.
What is Collect Freight?
In the instance of collect freight, freight payment is made by the consignee, also known as the receiver or the shipper. All LTL and additional charges are their responsibility. This term is also understood as “Collect Upon Arrival” because it is at the time the shipment arrives.
What is Prepaid Freight?
In the case of prepaid freight, the cosigner, otherwise known as the shipper, is responsible for all LTL freight charges and any additional charges added. This term is also sometimes known as “Prepaid & Add.”
What is Third Party Freight?
In the case of third party freight, this means freight payment is neither the responsibility of the shipper or receiver, but falls to the responsibility of a third party, generally a logistics company. The involved logistics company is the one responsible in this case for all LTL and additional charges. This could happen for a various number of reasons.
No matter which way the freight is billed, it will indicate on the Bill of Lading which freight terms are being used to give you a clear indication of who is responsible for billing purposes. Knowing and understanding the differences between collect freight, prepaid freight, and third-party freight can help you map your business decisions and make sure you’re partnering with carriers who use your preferred terms.
What Can LTX Do for You?
When using LTX transportation services, you won’t have to worry about these small details. As long as you provide your business practices them, they will operate within those on your behalf to get you the best rates and services.
LTX won’t just handle one aspect of transportation for you. They’re a one-stop shop for your all-encompassing transportation needs. LTX can handle your LTL (or less than truckload) shipping needs for you from selecting a carrier to tracking transits. They can provide customized transportation to your company, so you don’t have to.
LTX will start with an extensive review of your shipping data to analyze each part of it to make sure you’re getting the best rates. LTX will even handle the contract negotiations on your behalf, using a thorough knowledge of the industry with your best interests in mind. They can weight options like least-cost, overall services, and whether or not you want a large or small mix of carrier options to get you exactly what you want and precisely what your company needs.
LTX offers an extensive range of transportation accounting services to free up your in-house accounting team from the hassles of navigating freight invoices. Plus, with LTX, the added benefit of pre and post freight auditing can help you gain money back that has been overspent on errors in your freight invoices. They’ll consolidate the invoicing process, so the paper flows straight to them, and there’s nothing you have to navigate. They’ll even make carrier payments on your behalf. Once the invoices are sorted and approved to pay, they will pay the carrier, and you will receive a copy of your invoices.
LTX uses state of the art transportation software solutions to streamline all facets of the transportation process. Their all in one freight management software allows you to oversee the process from start to finish which saves time, money and improves future decision making.
With their customizable IT solutions, each customer they work with receives new; custom built IT solutions that fit their needs. Whether it’s a simple application or dashboard, or even a claim portal, LTX can create exactly what your business needs to address the issues you’re having.
LTX offers data and analytics through cloud-based reporting tools that are currently leading the industry. With all your metrics at your fingertips, your company can comb over even the smallest details of your freight business to make future decisions about any facet of your business. This kind of reporting gives you the unique ability to answer any questions at any point of the supply chain. Keeping you informed is their number one goal with reporting. LTX can also send monthly reviews and year-end reports to keep you informed about what’s going on with your freight business.
LTX Solutions has all the transportation and logistics tools needed to improve your efficiency, manage your LTL freight, personalize your experience, and collect data for the future of your business.