Freight Brokers

Liquidation Freight Brokers: Things You Should Know

There are a lot of freight companies out there and sometimes you’re in a position of needing to lock down freight yourself: whether you’re new to buying a pallet or truckload, or someone starting to sell in wholesale or liquidation. With so many options, how do you go about picking the right one?

The first thing to understand is that freight brokers and liquidation brokers are very similar in regard to their core operation. When dealing with a liquidation broker, you need to consider the visibility into your business you will be giving them and what you can do to protect your business.

If you buy something from a liquidation broker and deliver it to yourself, no big deal. You are using the liquidation broker’s source and delivering it to yourself with little to no risk. The only person at risk here is the broker.

The liquidation broker relies on his or her source to maintain anonymity to avoid truckload buyers attempting to cut out the broker and go straight to the source. However, this can get tricky and requires vital attention to detail as there are revealing factors that can easily go unnoticed.

One of the most commonly missed details is the presence of markings or labels on pallets that may directly indicate the source from which the pallets originated- a dead giveaway in other words. Let’s say the pallets have no markings and up to this point there is no other indicator that would reveal the source- the liquidation broker is still not in the clear yet. 

The next step in maintaining anonymity lies solely on the freight carrier providing the correct paperwork to the customer. The carrier will be provided a Bill of Lading (BOL) for his or her reference that accurately states both the pick up and drop off locations. However, in many cases liquidation brokers will also provide the carrier with a Blind Bill of Lading that does not include the accurate pick up and drop off locations. This is the liquidation broker’s last level of security to further conceal their source and their client from each other. Very important- It is the carrier’s responsibility to provide the source and the client with the Blind BOL upon pick up and drop off rather than the original BOL that contains sensitive information. 

You may think, “but that seems a bit like a cover up, dishonest even, is it common to ship a load blindly?” The answer is yes, tons of loads in the liquidation industry are shipped double or even triple blind as nothing more than an added layer of security. This is an industry standard in Liquidation as well as other industries. 

It is important to understand this, because picking the right freight company is just as important as picking the right liquidation broker. Now that you understand the risks involved with brokering liquidation loads, let’s talk freight!

Similar risks are involved when picking a freight company to handle your shipping. If you think this doesn’t apply to you because you do not broker liquidation truckloads, do not be fooled. If you are not dealing with a Freight company that operates with the highest level of integrity, what is stopping the freight company from giving your supplier info to other people? Maybe it is the “good ole boy” system and they drop your supplier to your competitor. Maybe they sell that info for their own personal gain. Kickbacks and envelopes of cash for sources is very much a thing. If you broker liquidation truckloads, your source is not the only thing at risk here, your customer info is at risk as well. Have you ever sold someone a truckload and they ghost you afterwards, or one of the situations stated above happens? How can you protect yourself?

It all comes down to how you set up both relationships. First, let’s talk about liquidation suppliers as this is much more tedious than the freight side. Make sure you take the time to try and put in place some of the following safeguards. When establishing a relationship with a supplier, ask them what safeguards they can provide to protect the business relationship. Lots of liquidators will not sell to their broker’s customers. Which is why the liquidation industry seems super incestuous and difficult to get close to the source at times. If they will not provide you some reassurance that gives you some protection, in my experience, they will take your customer when it benefits them.

Some suppliers may be ok with signing a non-compete or non-disclosure agreement. Some will not but will give you a verbal commitment. Some suppliers have the capability of setting you up in their system and assigning customers to you. So, if you give your supplier your customer info, when your customer calls, one of two things happens. They may send your customer back to you, or they give them an outrageous price which sends your customer back to you.

I know some people are like “no way am I giving a supplier my customer info”. I understand your skepticism. However, this is a proven method that works when dealing with companies with integrity. This is also why so many brokers have been able to position themselves as real players in the industry.

Freight brokers are no different. If you deal with a broker that jumps from freight company to freight company and takes his clients with him, that is a sign of shady business practices. As freight companies have policies that customers gained while employed belong to the company, not the employee. Let that sink in.

Smaller freight brokers can often give better rates as overhead may be lower, but will they act with integrity when it comes to your business? This is where you have to play the long game and realize that a bigger company that has been around for years may serve you better. There is a lot of skepticism in that statement. But if a freight company will sign a NDA to keep your business info protected, or has some other measure of reassurance to protect you, an extra hundred dollars on certain lanes is well worth the peace of mind so you can grow your business.

Bigger companies will have better relationships with carriers. Maybe they’re not great for every lane you run, this is why you should shop freight just like you shop liquidation loads. Get two or three freight companies you want to do business with, create a freight group and email all of them every time you need a freight quote- let them compete against themselves. It is never a good business decision to have all your eggs in one basket.

In closing, keep in mind nobody will protect your business for you. It is your responsibility to make good decisions for your business. Nobody knows what is best for your business like you do.

Do not take people for their word in the beginning, go by what they do. Make them earn your trust. Get references and do your due diligence before you just get into bed with someone.

Businesses that operate with integrity will want to build long lasting relationships that are mutually beneficial. Price is important but is a couple hundred dollars here or there more important than your company’s IP. (Intellectual properties)

We have listed a few references of freight companies that will take your IP seriously and have a proven track record in the liquidation industry that Liquidation Map has either used, or who have been recommended by several vetted members of the industry. They understand what liquidation companies need and go above and beyond to take care of their customers. If you are not sure where to start, these companies are a fabulous place to start.

As always, be smart and shop wisely.

Total Quality Logistics

Jordan Humphrey | Logistics Account Executive – SGL

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  • Address – 6525 Centerville Business Pkwy, Centerville, OH 45459
  • Phone – 513.831.2600 (ext: 48620)
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