What is Unclaimed Freight?

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.

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.