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Most of the big customers in the US (like Walmart and the grocery stores specifically from my experience) ask vendors to provide them with two prices, one with transportation and one without. They get competitive bids from every vendor they have.

It naturally favors people who can ship from closer to the DC. It also means that if the produce is coming from Mexico that time of year people who are better (read: cheaper) at transportation have a significant advantage.

Given the choice if the product is perishable the customers want it sourced as close to the DC as possible for quality and cost reasons. It's why I found it very funny when Walmart got a ton of credit for sourcing most of it's produce as close to locally as possible. They weren't doing it out of charity, they were doing it because it's blatantly good business. They didn't do it to make the hipsters happy lol.

I've very rarely seen a shipper turning a profit on transportation. The ones that I have seen turning a profit on transportation are typically just doing it because they can (in the very specific case I'm thinking of the product is somewhat unique and has very little competition... we should all be so lucky) and it doesn't have much to do with the miles traveled.

 

I've had these too, although I never felt that was 100% legit...giving the receiver to sign a fake document. So are they even legal, or legal enough?

edit: Let me rephrase: Are the blind shipments not a fraud?

 

Blind shipments are about not trusting the shipper rather than about deceiving the receiver. I see it a lot out of Nogales and Edinburg but rarely out of anywhere else. It's important to note that blind shipments are an excellent indicator for getting ####ed around with on the loading. Obviously the relationship between the people buying the load and the people selling it isn't great... Which means that there's a pretty strong chance they load every single truck they are personally sending before they load you. Wouldn't want to run out of product for a load that could impact their reputation with direct customers after all.

EDIT: Nothing illegal about them though. Just regular business practice in some parts of the produce business.

 

Still did not answer the question of where the missing miles get billed for goes.

 

I remember that they were quite random and more occurring when I hauled produce. Also out of Washington and Oregon too. It could be a problem when a DOT cop in Iowa discovering that you have two BOLs, and they were comfortable hopping inside your truck and searching for paperwork under pretense of searching for alcohol and guns, would think that you manipulated your time trail by having two BOLs. They like to call every single entity they find listed on every piece of paper, including receivers and shippers...
I don't see too many blind shipments with a dry van freight. I had it once, it was some plastic regrinds in big totes, which made me curios why all the masquerade for such a worthless cargo, like anybody cares where it's from.

 

There are no missing miles. They aren't charging the customer for miles they are merely charging for 'transportation'. If they can get it from closer others can get it from closer so the 'transportation' needs to be appropriate or they won't win the bid.

The system as currently structured pretty much always gets the freight from the nearest possible place at the lowest possible transportation cost. This is by design and it works quite well.

Rest assured that during the part of the year where all of the produce is imported the transportation cost reflects that. And rest assured that when you're shipping a load of produce to a DC <200 miles from the field that's also reflected in the transportation cost.

The paperwork doesn't actually decide anything when it comes to cost which is why the receivers don't care if it makes no sense. They aren't unaware that the product doesn't come from FL during the off season. They don't really care where it comes from as long as the quality and price are right.

 

You can bet your ### the people shipping it and the people they were buying it from cared. It has to be worth something or they wouldn't have put it on a semi. If it were really worthless it would have gotten railed for sure.

 

You mean to tell me that the regular shipment that normally comes from 1000 miles away is picked up by a truck from a secret location shipper only 250 miles away and delivered as if it really traveled 1000 miles away on a fake BOL(blind shipment)

There is 750 miles signed for on a fake BOL.
Who's getting the discount? Or paying for the missing miles.

 

I can speak to blind shipments- I have a few customers who have me do them semi-regularly.

As far as the transportation costs are concerned: they're the ones handling the cost, so consequently they wind up eating the cost of the shipment. Their reason for doing it is typically that they don't want the shipper to know who their customer is, because there's an assumption that said shipper will attempt to cut them out and try to sell to the customer directly. There's nothing illegal about it; it's mostly, at least in my case, done to prevent my customer from dealing with competition for their customer.

 

In produce that's actually impossible. The product gets grown somewhere. It has to come from that place to the receiver somehow and nobody is working for free anywhere in the chain. If there was produce being grown <250 miles away that would be in the transportation price because there are always a bunch of vendors bidding.

If someone DID magically grow some product in a greenhouse or something closer to the receiver than anyone else they could indeed pocket the savings. This is seen as completely fine and a just reward for figuring out how to be more efficient by the receivers. There's basically no chance it would go on a blind BOL though.

One of my produce customers sends a ton of loads to Publix in FL. During the FL produce season they are sending produce that they either grew them selves or from farmers whose whole crop they purchased. No blind BOL's required as this is their bread and butter period and they are in good standing with everyone they are working with. If they have a farm that is closer to the DC than a competitor that's one of the reasons why they own that DC that time of year... Because they can underbid the other guy easily and still turn a profit.

The market isn't very transparent, but most commodities have sourcing regions that are pretty stable year to year. Customers pay the standard rate for transportation from those regions and don't worry about it beyond that. And honestly that works fine, because nobody has anything closer or that wouldn't be the standard production area for that time period.

EDIT: If you ever wondered why the prices of produce fluctuate wildly in the grocery store this is a huge part of it. How far it comes from can actually as much as triple/quadruple the price and that usually changes how much the stores can sell, which changes their order sizing pretty considerably.