In plain English
On the bill of lading, freight prepaid is one of three payment options. The shipper (or the party the shipper named) is billed by the carrier. The receiver signs for the delivery and owes the carrier nothing.
Prepaid does not mean the receiver never pays. The seller may still add the freight to the invoice, which is called prepaid and add. It can also mean the freight is built into the price of the goods.
Why it matters when you ship
Prepaid keeps the shipper in control of the carrier choice and of the bill, which is why sellers use it for important customers or when they want a single delivered price.
The catch is that the shipper pays first and is then exposed if the goods are damaged or refused, so record the condition of the freight at pickup and keep the paperwork.
Example
A manufacturer ships a pallet to a customer with the bill of lading marked prepaid. The carrier bills the manufacturer. The manufacturer includes the freight in the price quoted to the customer.
Related terms
Learn more
Freight prepaid: common questions
What does freight prepaid mean?
The shipper pays the carrier for the freight, and the receiver is not billed for it at delivery.
Is prepaid freight the same as free shipping?
Not necessarily. The seller may have priced the freight into the goods, or may add it to the invoice (prepaid and add).
Cite this page
Cite as: Transportli, “Freight Prepaid Meaning in Shipping”, https://transportli.com/glossary/freight-prepaid/, updated November 11, 2026.
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