The supply chain system is the expansive operational infrastructure for businesses, especially corporations. A supply chain is the equivalent of a blood vessel and nervous system for industry.
And operational supply chains are vital for the shipping industry. Almost $96 billion in freight was shipped through the borders of North America in October 2020.
Another thing about industrial supply chains is that they are genuinely “invisible for most companies.” About 93% of global supply chain infrastructures are partially or fully invisible to companies.
Many companies have no problem with invisible supply chains. For example, 80% of companies don’t know or don’t want to know if their supply chain transacts in conflict materials from politically charged regions.
However, there are more straightforward reasons why supply chains are voluntarily invisible – all parties involved want it that way. Some companies don’t want to be involved with shipping, selling, or inventorying, just manufacturing. Others want to save money or protect the integrity of their customer lists.
Blind shipping is one widespread practice that partially accounts for the invisible supply chain.
Want to know more about blind shipping? Contact Alba Wheels Up today.
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What Is Blind Shipping?
Blind shipping is the delivery practice of blindly shipping freight or products from a shipper to a consignee via a third-party who does the actual shipping. In a way, blind shipping is very similar to the online e-commerce practice of drop shipping.
And this is not to imply that blind shipping occurs spontaneously or against the wishes of one or both parties involved.
In reality, the third-party shipper’s information is recorded but is not shared at the request of the shipper, consignee, or both. So, while a valuable freight shipment gets shipped in this scenario, perhaps domestically or internationally, the shipper and the consignee don’t know the other’s true identity.
Additionally, while blind shipping can be initiated by a shipper or a consignee, or both, it is usually a third-party entity that acts as a middleman.
What To Know About Blind Shipping
Now that we have explained blind shipping, which can sound abstract and intimidating to the uninitiated, it’s important to emphasize that it is a legal, standard, and widespread practice in the transport industry.
So, how does one initiate blind shipping?
How Does Blind Shipping Work?
The initiation of blind shipping all begins with how a bill of lading, also known as a BOL, is filled out, documented, and filed.
A bill of lading is a shipping record, document, and receipt legally required to ship freight. Additionally, a bill of lading is also a de facto contract and copy of title between the shipper, consignee, freight carrier, and unknown to some, the third-party entity.
A blind shipment request will have two different and distinct bills of lading instead of one. So, the shipper’s first bill of lading is utilized to pick up or transport the goods.
And the second bill of lading is utilized by the carrier service. It is then given to the consignee when the freight is delivered.
As per the prior arrangement, either the shipper or consignee will receive a “dummy” or original bill of lading for the transaction.
After the shipping transaction has been finalized, the freight carrier will switch the bills of lading. This act documents the third-party entity’s participation to ensure the freight goes to the right destination.
A blind shipping request is never made spontaneously, only upon request. Freight carriers will mandate identity documentation for the shipper, consignee, both, or the third-party entity to start the process.
The freight shipper will require such documentation to legally protect themselves when they switch bill of lading receipts later in the process and get paid.
Blind Shipping vs. Drop Shipping
Blind shipping and drop shipping are similar in business operational methodology but different in business practice.
For one thing, blind shipping is a practice that is more in common with large-scale freight and container transfers. Blind shipping requires the participation of the shipper, consignee, freight shipper, and perhaps a third-party middleman entity.
Dropshipping is mainly online e-commerce for small and large companies that don’t want to deal with inventory, marketing, selling, tracking shipments, or consumer relations. So, they get a drop shipper to do it.
Companies save money and time this way by having a third-party drop shipper handle the inventory and shipping.
Blind shipping is a traditional freight shipping transaction except that one or both parties are anonymous to the other.
A drop shipper charges a flat fee for their service or pockets the difference between a wholesale and retail price for a product if they sell it for the company hired by them. If a drop shipper sells a luxury watch with a wholesale price of $40 for a retail price of $100, they pocket the difference.
Blind shipping is a practice in an industry where all parties are probably well-known to each other. Drop shippers need to develop their consumer base to make money.
A company utilizes blind shipping or drop shipping relative to the needs of their operational business plans.
Benefits Of Blind Shipping
There are several benefits to initiating a blind shipping transaction. Here are three to consider.
Management Technique
Blind shipping is an optimal shipping practice for businesses that don’t have a warehouse, a practical supply chain infrastructure, or a warehouse workforce to maintain a supply chain.
Blind shipping techniques are standard in the drop shipping industry.
Most companies with one physical location use blind shipping to mask their third-party status and maintain their customized supply chain practices.
You can also use blind shipping to keep your customers from bypassing you and going directly to a supplier.
Protect Competitive Advantage
You can use blind shipping to protect your business practices and save money. It’s a big industry, people talk and trade business secrets, and corporate data espionage is rife.
Companies have entire departments dedicated to learning the secrets of their competitors, like learning who their suppliers are or supplier supply chains’ efficiency characteristics.
Blind shipping can help you buy and sell at a price that is always beneficial to you. You can use blind shipping to negotiate prices that work for you without being overcharged.
Blind shipping can help you protect whatever competitive advantage you enjoy over competitors.
Protect Your Supplier
Blind shipping can also protect the business practices of your supplier. After all, your supplier does not deal with one client. And if they do, they won’t want their cover blown if they make side deals.
For example, your supplier may be charging you a lower price for a transaction relative to other clients.
Or your client may have an exclusive deal with another client that they don’t want to jeopardize.
Some shippers may also enjoy the leverage they have by transacting with multiple clients and not dealing with industry politics.
It could also benefit you not to help your competitors easily identify one of your most trusted and beneficial suppliers.
Double Blind Shipping
Double-blind shipping is the more secure, next-level version of blind shipping.
With a double-blind shipping transaction, no addresses or specific identifying information is on delivery or pickup bill of lading receipts.
The manufacturing business won’t know the consignee’s address and vice versa. Also, the shipping company’s address remains a secret to related consumers.
With double-blind shipping, the operational information of all parties involved is protected.
Additionally, double-blind shipping prevents consumers from going directly to the wholesaler or manufacturer and vice versa.
Double-blind shipping is an optimal practice for businesses with vital trade secrets to protect.
Conclusion
It is essential to be an honest broker in the business world, but at the same time, the business world is high-pressure, cruel, and full of competitors who will strive at any means to succeed.
Blind shipping, and double-blind shipping, helps you to retain professional business secrets and competitive advantage.
If you need help with blind shipping and need guidance from a company that understands shipping industry policies, then consult with Alba Wheels Up today.
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