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Also known as cash on delivery (COD), it is when a carrier first receives the payment for the goods being transported from the consignee before they are released for shipping.
Note that shippers will only request the advance payment of the load being shipped and not the full shipping charges. However, others include the shipping charges on the total.
The most important point here is that with COD, it is the load being paid for whether and might or might not include the shipping charges. This allows the delivery person to collect the payment of the goods from the consignee, whether in cash, certified funds, or company check, then remit the payments to the seller. The load is then delivered once the driver receives money from the consignee. COD goes a long way in saving trucking companies from unnecessary frustrations. This is because some consignees might be quite troublesome with payments. Trucking companies, therefore, have to do the double work of pushing for payment long after offering their services.