While Prepaid & Add is one of the most common shipping payment methods for LTL shipping, an alternative of shipping collect could be the better option for your business. Using prepaid & add, the seller pays for the shipping and chooses the carrier and shipping terms. However, using Shipping Collect, the buyer or receiver of the shipment can choose the carrier and negotiate payment terms on their own. This can offer a variety of unique benefits over other payment options. Companies partnering with a 3PL would utilize what is known as third party collect.
Shipping Collect vs. COD
A common misunderstanding is the distinction between shipping collect and COD or “Cash on Delivery.” While the idea behind these two payment methods is similar, the two are very different. In shipping collect, the receiver or consignee of the shipment is billed by the carrier for the cost of the shipment. This eliminates any handling charges, which means you’ll save money.
COD is a payment method by which the consignee or receiver of the shipment pays the driver or deliverer of the shipment. In a shipping collect situation, the receiver would simply pay the carrier.
Benefits of Shipping Collect (or 3rd Party Collect)
Shipping collect is a popular shipment method for businesses of all sizes looking to save on the cost of shipping on purchases that arrive to their office daily. There are several unique benefits to utilizing this payment method.
- Save on shipping cost. Because shipping collect allows you to choose your own carrier, it also means you can utilize the negotiated rate you’ve already arranged with your carrier. This gives you the opportunity to take advantage of any bulk shipping rate you’ve already arranged.
- Control the shipment route. By taking control of the carrier and payment terms, you also have the opportunity to take control of the shipment route for your packages. You can choose how many and how often trucks deliver to your door.
- Control delivery flow. Getting control of the delivery frequency also means you can create a receiving process that maximizes the effort of your staff. Whether you only receive packages in the morning, or you receive them right after a shift change, you control the flow of delivery.
- Maintain tracking. By choosing the carrier of your choice, you also have the added benefit of being able to utilize the tracking process you already have in place. This can help you keep organized and in-the-know on important shipments to or from your place of business.
- Choose your carrier. And of course, the biggest benefit of shipping collect is that you can choose the carrier you like the best. Whether it’s one you have a negotiated discount with or one you know will always get your shipments there on time and undamaged, the choice is yours.
Learn More About LTL Shipping
To learn more about the many shipment options available to you, contact a full service third party shipping and logistics company. Amware offers a variety of shipping services and methods to make your logistics process as seamless as possible. Contact us now to learn more about 3rd party collect, or request a free 30-day trial of our proprietary LTL software, Amrate, below.