Import freight terms guide
IFP inland freight prepaid: prepaid vs collect buyer guide
Inland freight prepaid, often shortened to IFP on routing or freight documents, decides who pays pickup, trucking, or inland delivery before the main shipment moves. Buyers should compare freight prepaid vs collect and third-party inland freight before approving supplier invoices or forwarder quotes.
Freight terms at a glance
| Term | What it means | Buyer check |
|---|---|---|
| Freight prepaid | The shipper pays the main freight or named freight charge before the cargo moves or is released. | Confirm whether prepaid covers only ocean or air freight, or also origin handling, documentation, and delivery. |
| IFP | Inland freight prepaid, usually meaning inland pickup, trucking, or delivery charges are paid before release or before the next transport leg. | Ask whether IFP refers to origin pickup, destination inland delivery, or a specific third-party freight account. |
| Freight collect | The consignee or buyer pays freight charges at destination or through its forwarder account. | Ask the forwarder to list destination charges before comparing with prepaid supplier quotes. |
| Third-party inland freight | A logistics provider, buyer account, or other third party pays local pickup, trucking, or inland delivery charges. | Match the third-party billing party to the purchase order and freight invoice so costs do not duplicate. |
| Incoterms | Rules such as EXW, FOB, FCA, CIF, or DAP define handoff points, cost responsibility, and risk transfer. | Do not rely on prepaid or collect wording alone; tie every freight quote to the Incoterms rule and named place. |
Where buyers get confused
A supplier can say freight is prepaid while still excluding destination charges, customs, delivery, demurrage, or inland trucking. A forwarder can also bill third-party inland freight separately even when the main international freight looks covered, and an IFP notation may only apply to one inland leg.
- Ask whether inland freight prepaid or IFP means factory pickup, origin drayage, destination trucking, or another inland delivery charge.
- Ask which charges are prepaid: pickup, origin handling, export documents, main freight, destination handling, and final delivery.
- Check whether the supplier quote uses EXW, FOB, FCA, CIF, DAP, or another Incoterms rule.
- Compare the supplier invoice and forwarder quote line by line before approving a shipment.
How to audit a freight invoice
Start with the purchase order Incoterms and named place. Then compare each freight line against the supplier invoice, forwarder quote, Bill of Lading or Air Waybill, and destination invoice. The goal is to catch duplicated charges early.
- Confirm who pays origin pickup and inland freight from the factory to the port or airport.
- Check whether main freight, fuel surcharge, security fee, documentation, and terminal handling are included.
- Flag any third-party inland freight line that is not tied to a shipment reference, pickup address, or delivery order.
What to put in supplier and forwarder instructions
Clear instructions prevent disputes. State the Incoterms rule, named place, billing party, freight account, pickup address, carton count, gross weight, and which party must approve extra charges before cargo moves.
- Use one freight responsibility table in the purchase order so supplier, forwarder, and finance teams align.
- Require written approval before accessorial charges, storage, demurrage, or truck waiting time are accepted.
- Keep freight invoices linked to packing lists and commercial invoices for landed-cost reconciliation.
Buyer FAQs
What does IFP mean in freight shipping?
IFP usually means inland freight prepaid. It indicates that an inland pickup, trucking, drayage, or delivery charge is prepaid by the named shipper, seller, buyer account, or logistics party. Buyers should confirm which inland leg the abbreviation covers before approving the invoice.
What is freight prepaid vs collect?
Freight prepaid means the named freight charge is paid before cargo moves or is released. Freight collect means the consignee, buyer, or destination account pays the charge later. The wording does not replace Incoterms, so the buyer still needs the named place and responsibility table.
Can third-party inland freight still be prepaid?
Yes. A third party such as a forwarder account or buyer logistics provider can pay inland freight before release. The invoice should name the payer, shipment reference, pickup or delivery address, and whether the charge is origin or destination inland freight.