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What is Unclaimed Freight?

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  • Written By: Michael Pollick
  • Edited By: Niki Foster
  • Last Modified Date: 21 September 2016
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Much of the manufacturing process is straightforward -- companies produce products, retailers sell these products and consumers buy them. The one uncertainty lies in transporting these products from factory to shelf. Some shipments simply don't arrive at their destination in acceptable condition, creating a situation known as unclaimed freight.

Not all unclaimed freight is damaged or otherwise unsuitable. Some such freight is the result of a miscommunication between buyers and sellers. If the wrong parts are shipped out from a factory, for example, the receiver may not feel obligated to accept delivery. The shipment may be sent back to the manufacturer, or it may go unclaimed and sit in a warehouse indefinitely.

Other goods may arrive with significant damage caused by the carrier. If a certain percentage of the shipment shows signs of trauma, the receiver can refuse delivery and receive credit for the unusable products. The damaged goods then become unclaimed freight and may be destroyed, stored or sold off to third parties. Oftentimes the damage is minimal, but the original buyer doesn't want to assume risk for unseen problems in the remaining products.

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Unclaimed freight doesn't always remain unclaimed for long. After a certain amount of time has passed, many freight companies allow individuals and private companies to purchase or simply remove the freight. Once the most heavily damaged products are removed, the result could be an entire load of resalable goods. An entrepreneur could rent a commercial building and offer these products at a substantial discount to the public.

Another way resellers can liquidate unclaimed freight is through a listing service. Dealers in unclaimed freight often maintain a list of potential customers who seek specific types of items. The owner of an automotive repair shop might want to know if a shipment of tires or replacement parts arrives at the warehouse, for example. If a shipment matching a particular customer's interests does arrive, the reseller can arrange a wholesale deal or negotiate a price for each item.

Unclaimed freight is usually considered abandoned property after a certain amount of time has passed, so ownership rights are rarely in question. The original buyers had the right to accept possession of the damaged or unusable goods and chose not to claim them. The freight or shipping company holding these products must dispose of them eventually, so it is often in their best interest to contract with a private party for resale and salvage.

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horsebite
Post 3

The trick is to buy things that you know you can get rid of quickly. A train car full of tires or razor blades or diapers or something like that, I would buy in a second. Millions of people use those things every day.

If the load is something more exotic or specialized, you have to be a lot better versed in the local and national demand for the item. Nothing like getting stuck with 200,000 rubber novelty chickens to really make you wise up quickly.

Nepal2016
Post 2

@MaPa - While I don't doubt some people make money at this, you have to be careful. Like a lot of things, it looks easier than it is. Otherwise, everyone would be doing it.

There are lots of places to buy unclaimed freight. Like any other business, some of them are shady and some aren't. You have to know not only your buyers, but also your sellers. I would imagine it's a fairly small community, and these days, especially with the Internet, it would be fairly easy to track down the problem children.

MaPa
Post 1

There are people who make really good money buying this kind of thing for pennies on the dollar and then reselling the good stuff. The problem is that it comes in really big lots, and you have no guarantee that there is a market for what you buy. But if you know your market and try to only buy things you can inspect ahead of time, you can make a killing.

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