6 Freight Terms Everyone Should Know

4/11/2013

Freight terms can be confusing.

Acronyms, abbreviations, shorthand and jargon make up the shipping freight lexicon. Many terms commonly used in the freight world can often leave people in a state of confusion.

For even more terms, check out my follow-up post, 5 More Freight Terms Everyone Should Know.

Common Freight Terms
Below are some of the terms everyone working in (or with) the freight industry should know.

LTL and TL
LTL is an acronym for Less Than Truckload. This means the shipment does not require a full 48 or 53 foot trailer. There are many carriers that specialize in or offer this service.

Like full truckload carriers, LTL carriers specialize in a variety of services such as lift gate and residential pick-ups; deliveries; guaranteed services; protect-from-freeze; transit and bottom-line-cost to name a few. Rates for LTL freight are determined by class, weight, pick up and destination zip code.

TL is an acronym for Truckload. The quantity of freight required to fill a trailer; usually more than 10,000 pounds.
PRO Number
A pro number is a sequential numbering system that is used to identify freight bills. A Pro number is like a social security number for your shipment because it is unique to every individual shipment.
FOB
This acronym officially stands for Free on Board as defined by the Uniform Commercial Code but informally you may also hear Freight On Board. The term FOB is commonly used to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer.

FOB Shipping Point or FOB Origin indicates the buyer pays shipping cost and takes responsibility for the goods as soon as the goods leave the seller's premises.

FOB Destination designates the seller will pay shipping costs and remain responsible for the goods until the buyer takes possession.
BOL
The Bill of Lading is a legal document between the shipper of a particular good and the carrier. A BOL details the type, quantity and destination of the good being carried.

The bill of lading also serves as a receipt of shipment when the good is delivered to its predetermined destination. This document must accompany the shipped goods (no matter the form of transportation) and must be signed by an authorized representative from the carrier, shipper and receiver.
Consignee
The consignee is the individual or business that receives the freight being shipped.
Billing Terms
Billing terms are an important part of the freight lexicon. TPB stands for third party billing. This is a scenario where neither the shipper nor the consignee is responsible for paying the freight charges. Instead there is a third party who is responsible for the charges.

Freight Collect is a term that means the freight will be paid by the person receiving the shipment.

PPD & Add stands for prepaid and add. This means that the shipper pays the freight company then bills the customer the actual freight charge.

Is there a freight term that you don't understand? Let us know by commenting below and we will explain it for you or check my follow-up post, 5 More Freight Terms Everyone Should Know.

Post by: Amber Potts, Customer Service Representative

66 Comments

Monika

8/23/2013 06:04:32 am

who has to pay freight if it is written on the freight bill "to pay " or "to be built "

Amber

8/28/2013 03:18:23 am

Hmmm… I have never seen anything like this. It almost sounds similar to C.O.D. on a Bill of Lading (BOL). If this is the case, the receiver pays freight directly to the driver.

It would be unusual to collect on a "freight bill" for two reasons: 1) if it hasn’t been built to deliver, freight carrier services are not involved yet and 2) fuel surcharges can vary from week to week (if money is collected from the customer this week and it delivers next week, the charges will be different).

Good luck and let me know what you find out.
-- Amber

Annette

8/15/2019 09:41:10 pm

question

I’m filling out a request quote sheet for a big box store and 2 items on here have me puzzled:

1. Signage Allowance - do they want me to pay for the signs
2. Slotting Allowance - what does that mean?

Nelson Blog Team

8/23/2019 08:42:38 pm

Thanks for your question, Annette. We checked with Amber and she was not familiar with either of those two terms.

She suggested contacting the persons in charge of setting up that pickup form and ask exactly what they are looking for.

Please let us know what you find out and post the answer here to help others in the future. Thanks!

Betty

5/9/2014 12:26:52 pm

Freight PPD on orders of $5000 and over, does this mean that the shipper pays for the freight any orders over $5000.

Amber link

5/12/2014 02:25:59 am

Yes, that is how I understand it. It would be best to double check with the supplier. You should have the supplier confirm that for orders over $5000.00 shipping is free to the customer.

Jackie

5/13/2014 02:18:34 am

what is PPD 3rd vs PPD ADD thank you !

5/13/2014 04:55:41 am

Hi Jackie -

PPD 3rd is when the shipper pays for the shipping charges through a 3rd party broker logistics company.

PPD ADD is when the shipper pays for the freight and adds the charges to the buyers invoice.

I hope that helps clarify. Please let me know if you have any more questions.

Alfredo Bussy

8/23/2014 11:09:30 am

I am a wholesaler based in the USA. I buy from a factory in Italy.
I want to sell my goods FOB at the factory in Italy.
I have 2 bills; one is from the factory showing the cost of my goods; the other is my bill to my customer at a higher price.
The factory in Italy says that they cannot use my bill to the customer, but their bill to us for the cost of the goods for a FOB sale.
Obviously I don't want to show my customer what I am paying for my goods. So, how do get around this? Thank u much, alfredo

8/28/2014 09:05:02 am

Hi Alfredo -

We need some clarification with your questions before we offer any advice.

First ....
"I have 2 bills; one is from the factory showing the cost of my goods; the other is my bill to my customer at a higher price."

What type of bills are you talking about? Bill of lading, invoice or customs invoice?

and secondly ...

"The factory in Italy says that they cannot use my bill to the customer, but their bill to us for the cost of the goods for a FOB sale."

What bill would they have to supply? Their invoice when shipping?

Please reply at your earliest convenience.

Vincent

11/24/2014 07:26:33 am

Who is risk of loss during transit on a PPD shipment. It is not a incoterm.

11/26/2014 04:28:09 am

Vincent -

Is this for an international shipment?

Please reply at your earliest convenience.

Luann

10/23/2015 11:19:30 am

When does the customer take title of goods if it is PPD or PPD and add

10/27/2015 09:20:44 am

Luann -

Upon delivery.

Ray

12/19/2015 01:14:25 am

What does freeze protect mean on BOL

12/22/2015 03:28:35 pm

Ray -
Freeze protect means that you, as a shipper, are requesting freeze protection while the product is in transit. This means your product will not be in an environment where the temperature will drop below 32 degrees. Only certain carriers offer this type of protection. Before shipping your product, I suggest verifying that the protection you require is offered.

Trish

7/19/2017 11:03:02 am

the Freight Terms as PPD / Charge, should that be Charge to a 3rd party / buyers carrier account or charge the buyer fee to be paid with the invoice total?

7/26/2017 10:55:03 am

Hi Trish,

Freight PPD/ Charge(PPD & Add) means supplier sets up the shipment with their carrier of choice, pays the freight and then charges the customer for the move on their invoice total.

Please let me know if you have any other questions.

Thanks for stopping by our blog.

Laura link

8/2/2017 04:46:35 pm

When a BOL has prepaid and tpb checked(noting the tpb address etc), why do the carriers default to prepaid?

8/8/2017 08:55:55 am

Hi Laura,

When the box is checked both ppd(prepaid) and tpb(third party billing), the freight companies will almost always automatically resort to billing prepaid. This is because most of the time there is no 3rd party billing information provided for the trucking company to bill.

When filling out a BOL, please try to make sure that only the 3rd party box is checked. It is always important for the 3rd party billing address is always clearly spelled out. This way the trucking company will know exactly where to send the bill.

Thank you and please let me know if you have any other questions.

Best,

Amber

Donny

9/6/2017 12:56:07 pm

What does freight terms PPC mean? And when does the customer take title to goods under this arrangement?

11/6/2018 01:23:28 pm

Hmm... that's a good one. It depends on how it is being used on the BOL or bill. Maybe one of our readers can help. How about it readers, does anyone have experience with PPC?

Margie Gors

3/12/2019 02:13:33 pm

My customer advised it means Prepaid and Charge.

3/13/2019 03:04:06 pm

Thanks, Margie. Glad to finally have an answer for this one! We talked to Amber and her original guess was that it was likely something similar to Prepaid and Add.

Amber also wanted to address the second part of this question to say the customer would take title of goods upon receipt of them.

Lucien

11/8/2017 10:51:25 am

DE PPD

Nelson Blog Team link

11/20/2018 01:08:18 pm

Thank you, your question inspired Amber's newest post, "5 More Freight Terms Everyone Should Know". The answer to your question can be found here:

http://blog.nelsoncompany.com/home/5-more-freight-terms-everyone-should-know

Vanessa

1/2/2018 07:57:10 pm

What does it mean when FOB POINT field says "DSTNTN-PPD"?

Amber Potts

1/8/2018 01:49:44 pm

Good afternoon Vanessa,

DSTNTN-PPD stands for Destination-Prepaid. This means that the buyer takes delivery of goods being shipped to it by a supplier once the goods arrive at the buyer's receiving dock and the supplier is paying the shipping costs for the goods.

Hope that explanation helps. Should you have any additional questions please feel free to comment back.

Best,

Amber

Jacinthe link

1/29/2018 10:55:16 am

PPA Prepaid and ADD ?

2/21/2018 10:51:07 am

Good Morning Jacinthe,

Yes PPA means Prepaid and add. Meaning shipper pays for the freight charges using a carrier of the shippers choice and then passes along full or partial charges to the customer by adding the charges to customer's invoice for payment.

Hope that helps.

Best,
Amber

Carla

2/20/2018 01:46:09 pm

Hi,

I need some clarification on what the appropriate term to use in our terms and conditions. Our company's terms and conditions specifies that we (seller) will pay for freight charges up front and bill our customer (buyer) a portion of the freight charges. We also want the the buyer to accept ownership of the item(s) and have all the risks of transportation transfer to them once the freight carrier picks up the goods and signs the bill of lading at origin.

Would this be considered FOB origin, prepaid & add? If so, who would be responsible for filing a claim?

2/21/2018 10:56:17 am

Good Morning Carla,

Thank you for your question regarding shipping terms. The way you are shipping would be considered FOB Origin, prepaid & add.

The party paying for the shipping charges would be responsible for filing the claim for the cost of goods as well as the freight charges. If you should have any other questions please feel free to contact me at amber.potts@nelsoncompany.com.

Best,

Amber

Robyn

3/5/2018 06:07:32 pm

What does PPC/PPNC mean?

Mario

8/16/2018 05:24:07 pm

Hi Robin , I have the same doubt did you find out what means PPC term ?

11/6/2018 01:27:35 pm

Thanks for your question. PPC has come up before (but PPNC is new). Can any of our readers help with an answer for PPC/PPNC?

3/12/2019 02:15:55 pm

My customer advised it mean Prepaid And Charge. Maybe the N mean And.

3/13/2019 03:06:26 pm

Thanks, Margie. Sounds reasonable to us. Can any of our readers confirm if the N stands for "and"?

Laura

3/23/2018 09:12:38 am

What is the difference between PP&A and Prepaid? They are both delivered shipping terms, correct? Thank you.

3/23/2018 01:24:40 pm

Hi Laura,

PP&A is when the shipper would prepay for the shipping charges and then pass those charges along to the customer.

Prepaid is when the shipper agrees to pay the shipping charges and ship the product to the customer with no additional charges other then the product cost.

Hope this clarifies some questions you may have had. If you have any other explanation or questions please feel free to reach out.

Thanks,

Amber

Leah

4/18/2018 03:49:35 pm

What is freight terms 'PP PRTL' ?

11/20/2018 01:09:55 pm

MARIO ARGUELLO

8/16/2018 05:20:33 pm

What does means PPC shipment term ?

11/6/2018 01:32:08 pm

Wow... PPC is becoming a popular question but we haven't yet seen this ourselves on a BOL or bill. Anyone else have experience with PPC they can share?

3/13/2019 03:11:26 pm

One of our readers (Margie) answered a similar question and suggested that PPC means Prepaid and Charge. We're glad to finally have this one solved.

Melissa

8/24/2018 05:09:05 pm

ORG?

11/20/2018 01:10:51 pm

Rosa

8/30/2018 11:26:09 am

What does the ship term ZDD stand for? Thank you

11/6/2018 01:34:15 pm

Well, that's definitely a new one. How about it readers... can anyone help us define ZDD as a freight term?

Marcel

2/13/2019 01:57:45 am

Whats PPC?

2/15/2019 03:57:29 pm

Thanks for the question, Marcel. Many of our other readers have also asked about PPC. Unfortunately, we are still stumped on this one. If you find the answer, please update us here.

3/13/2019 03:16:29 pm

It took some time but one of our readers came through for us! Margie suggests that PPC means Prepaid and Charge.

J Hook

2/13/2019 02:54:03 pm

Is "Third party" a actual freight term? I take third party to be billing instructions, not a freight term like collect or prepaid.

2/15/2019 04:04:36 pm

Thanks for the question. As we see it, yes, third party is an actual freight term. Just as you would mark Prepaid or Collect on a BOL you would do the same if the billing or terms were 3rd Party Arranged.

The freight terms distinguish who is responsible for the freight billing on each shipment.

There are other terms including Destination or Origin that are also important for shipping but for determining who pays the shipping charges we use Prepaid, 3rd Party or Collect.

Marcia

3/26/2019 03:19:32 pm

what does FOB "Third Party" mean?

what does FOB "Ex-warehouse" mean?

Both Items were purchased from vendors to be delivered to plant.

Bina

8/8/2019 01:55:11 am

What TBB means in payment mode

8/23/2019 08:47:26 pm

Good question, Bina. Maybe one of our readers can help us out here.

We checked with Amber and she had not heard of TBB before. Although, she pointed out that TPB means third party billing.

If you find out, please add to the comments here. Thanks!

Catherine

10/11/2019 03:27:00 pm

What about FOB COL?

10/14/2019 07:52:45 pm

Thanks for question, Catherine. Here is what Amber had to say... FOB COL is short for FOB Collect. It means freight is picked up at the origin and then the freight move is billing COLLECT to the ship to customer.

Kim link

5/13/2020 08:23:14 am

if the freight terms show to be FOB Origin but the seller contract the freight company who is responsible if the goods are damaged or lost intransit?

Stephanie

10/13/2020 09:30:45 am

What does CC NO ADD mean?

10/13/2020 04:58:19 pm

Great question Stephanie. We checked in with Amber. She let us know that CC is Charges Collect. The next part is a guess... no add may mean no extra charges will be added from the shipper.

Maybe one of our blog readers has come across this one before. Comment here readers if you have an answer on this one.

Winston Boyd link

11/3/2020 04:51:33 pm

Did anyone ever define the incoterm ZDD? I've also been asked about ZOC.

7/7/2021 05:22:23 pm

Thanks for checking in Winston. More than 2 years later, we still don't have an answer for ZDD. ZOC is new too.

How about it readers... anyone have an answer for these two?

7/1/2021 02:35:54 pm

what does Freight Terms: "s s/p - collect" in shipping ?

7/7/2021 05:26:23 pm

Thanks for the question MP. We checked in with Amber and that's a new one for her too.

Maybe one of our readers can chime in to help us figure this one out.

Jessica

4/26/2022 06:40:26 pm

What’s does COD Fee prepaid or collect mean?

6 Freight Terms Everyone Should Know

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