Freight Prepaid vs Freight Collect on Letter of Credit Documents
How the freight notation on the transport document must reflect the credit and Incoterms rule.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
The transport document's freight notation must not conflict with the credit. Under CIF or CFR the credit often requires 'FREIGHT PREPAID'; under FOB, 'FREIGHT COLLECT'. Showing the wrong notation can be a discrepancy. Under UCP 600 Art. 26(c), a document may show charges additional to freight.
| CIF/CFR | Usually 'freight prepaid' |
|---|---|
| FOB/FCA | Usually 'freight collect' |
| Rule | UCP 600 Art. 26(c) |
Check
- Credit wording on freight.
- Notation on the B/L matches.
- Invoice shows freight consistent with the Incoterms rule.
Sources
General guidance, not legal advice. Your bank examines documents independently.
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