The terms free port and assigned port are used in logistics to distinguish who will pay the shipping costs, and these two definitions differ fundamentally only as regards the payment of these expenses.
Since these terms describe concepts unfamiliar to the uninitiated, in this article we will explain what is meant by free port and carriage forward, and when knowing these concepts can be helpful in choosing the correct type of shipment.
Free port and assigned port
As we have said, the difference between free and carriage paid lies in the payment of the shipment, and in the case of free port, the costs are borne by the sender, This is the case, for instance, when a person, be it a private individual or a seller, arranges and pays the shipping costs in full at departure to the appointed courier. Often, moreover, it is always the sender who is responsible for insurance against theft, loss or accidents of any kind that may happen to the goods. In the context of international carriage free, this type of shipment is identified by the abbreviation DDP, or Delivery Duty Paid.
Under the term assigned port, Instead, they indicate all those shipments in which the transport costs are paid by the recipient upon delivery, and the abbreviation we find in international shipments of this kind is EXW, or Ex Work. Thus, on the transport document of the goods, the assigned port will be indicated as a clause, as well as the amount of shipping costs, which clearly vary according to the type of goods and the size and weight of the parcel.
The choice of carriage paid or carriage forward depends on the arrangements made by sender and receiver for that particular foreign shipment, or to the modalities that a specific online buying and selling platform makes available to sellers and buyers. Taking the portals where used objects are sold as an example, often the buyer pays shipping costs at the time of purchase, and for the express courier who will take charge of the goods will be a free port shipment, which are generally the most common, unless a shop or e-commerce has special contracts with an convenient shipments.
However, when we speak of carriage free and carriage forward, we are speaking with terms used exclusively in the context of logistics, which have little to do with what the sender is faced with when deciding how to ship an item. In fact, in these cases it is more correct to use definitions such as ordinary shipping and cash on delivery, which we will explain in more detail in the next section.
Ordinary shipping and cash on delivery
The terms ordinary shipping and cash-on-delivery can be considered as the counterparts for the layman of the definitions of free port and carriage forward. Indeed, ordinary shipping is the equivalent of free port, in which the sender bears all costs relating to the shipment of the goods, including insurance against theft or damage to the items shipped.
C.O.D. shipping, on the other hand, is the freight charge, where it is the recipient who bears the shipping costs, which can be paid either at the time of purchase or at the time of delivery. In this case, the sender authorises the courier to collect a certain amount on his behalf, which may include either only the shipping costs, or the shipping costs in addition to the cost of the goods, and these amounts will then be reimbursed to the sender. In international shipments, this type of shipment is labelled COD, or Cash on Delivery.
Although today this is one of the most widely used methods, it was not always so, but the spread of cash-on-delivery went hand in hand with the spread of online buying and selling, by both private individuals and companies using dedicated e-commerce platforms, where users can purchase items and pay the shipping costs at the time of purchase or delivery, also using digital payments, which are also becoming increasingly popular.
Although cash on delivery was generally used for cash on delivery, today many couriers are also equipped with POS for digital payments, and with both payment methods the carrier will then transfer the collected amount to the seller. However, it is a type of shipment that needs to be carefully evaluated, both because the shipping costs are usually higher, and because in some cases the use of cash can be more complex, as well as not being traceable, and because there is always the risk that the recipient will not be at home at the time of delivery, which therefore needs to be rescheduled.
The fact that there is still a fair share of e-commerce customers who prefer this mode means that it is still offered by several online shops, and surveys have shown that it is frequently used for purchases in the food and furniture sectors, in the first case because the price depends on the total weight of the parcel, and in the second case because these are large sums, which people prefer to pay at the time of delivery, perceiving this mode as more secure.
When you decide to send a UPS parcel with C.O.D. delivery, it is a good idea to take a few precautions so that everything goes smoothly, starting for example with the contact the buyer to verify the actual intention to purchase and filling in the waybill with all the necessary information. In addition, it is advisable to activate a tracking service of the shipment, in order to avoid the recipient not being at home at the time of delivery. This is because if the goods are not delivered, the seller will not only lose the amount he was supposed to collect from that sale, but will also have to pay for both the shipment and the return of the goods.
