Legal Definitions - milling in transit

Milling in transit describes a shipping arrangement where goods are intentionally paused at an intermediate location between their initial origin and their final destination. During this temporary stop, the items typically undergo a manufacturing, processing, or finishing step before resuming their journey. This allows for efficient processing at a convenient point along the route, and the overall shipping cost may or may not be adjusted by the carrier due to this interruption.

Here are some examples to illustrate this concept:

• Imagine a large agricultural company shipping corn from farms in Iowa. Instead of sending the raw corn directly to a distant food processing plant, the shipment is temporarily diverted to a facility in Nebraska. At this intermediate stop, the corn is processed into cornmeal or corn syrup. After this manufacturing step, the now-processed corn products continue their journey to various food manufacturers across the country. This demonstrates milling in transit because the raw agricultural product was stopped mid-journey for a significant processing step before reaching its ultimate destination.

• Consider a timber company harvesting logs in the Pacific Northwest. Rather than shipping the bulky raw logs across the entire country to a furniture factory, the logs are first transported to a sawmill located in an adjacent state. At this sawmill, the logs are cut and milled into standardized lumber planks. Once processed, these more manageable and valuable lumber planks are then loaded onto new carriers for the remainder of their journey to furniture makers or construction sites on the East Coast. Here, the logs were temporarily detained for a manufacturing process (sawing) before completing their transit.

• A textile manufacturer might source large rolls of raw fabric from a mill overseas. Upon arrival in the United States, instead of going directly to a garment factory, the fabric shipment is routed to a specialized dyeing and printing facility in a central state. At this facility, the plain fabric is dyed specific colors and printed with various patterns according to customer orders. After this value-adding process, the now-finished fabric rolls are then shipped to different apparel factories to be cut and sewn into clothing. This illustrates milling in transit as the fabric underwent a crucial finishing process at an intermediate point before reaching its final manufacturing destination.