What does freight allowed mean?
The seller carries the cost of shipping. The buyer either never sees a freight charge or takes it off the seller’s invoice.
Freight allowed, in plain terms
Freight allowed is a payment term between a seller and a buyer: the seller bears the freight cost to the buyer’s location. It works one of two ways. Prepaid and allowed: the seller books and pays the carrier and does not bill the buyer for it. Collect and allowed: the buyer pays the carrier, then deducts that cost from what it owes the seller.
Suppliers often offer it above an order size, written as freight allowed on orders over a set amount or weight. Below that line the buyer pays the freight.
Freight allowed is not an ownership term
Freight allowed says who pays. It says nothing about who owns the goods on the truck, or who files a claim if they arrive damaged. That is the job of the FOB term, so the two are written together, as in FOB origin, freight allowed. For the ownership side, see FOB meaning in shipping.
The pairing decides who files a damage claim. Under FOB origin, freight allowed, the seller paid for the truck, but the buyer owned the freight from pickup and files the claim.
What it means on the bill of lading
The bill of lading names the party the carrier bills. On prepaid and allowed that is the seller, and the freight terms read prepaid. On collect and allowed it is the buyer, the terms read collect, and the deduction is settled later between the two companies, outside the carrier’s invoice.
A buyer on collect and allowed should keep the carrier’s invoice: it is the support for the deduction.
Related terms
Quick answers
Does freight allowed mean free shipping?
For the buyer, in effect yes: the seller carries the freight cost. It is rarely free to the seller, who usually builds it into the price or sets a minimum order to earn it.
What is the difference between freight allowed and freight prepaid?
Prepaid says the seller pays the carrier. Allowed says the seller bears the cost in the end. A prepaid shipment can still be added to the buyer’s invoice, so prepaid alone does not mean allowed.
Is freight allowed the same as FOB destination?
No. FOB destination keeps ownership with the seller until delivery. Freight allowed only puts the freight cost on the seller. They often appear together, but each can appear without the other.
Quoting a freight allowed order?
Send the lane, the weight and the pallet count, and we price it for the party paying the carrier.