Phillips 66: A Scrap Management Partnership Built to Last

The Challenge

In 2014, Phillips 66 came to Liquidity Services, then operating as Network International, with a specific problem. Their refineries generated scrap regularly, but no one was managing the contracts, pricing, or verification needed to confirm Phillips 66 was getting paid fairly for it. Scrap dealers set the terms. Phillips 66 has no consistent way to check that the money coming back matches what was actually leaving the site.

The refineries also needed a reliable way to sort scrap from surplus from material that should never have gone in a scrap bin in the first place. Without that distinction, Phillips 66 risked losing value twice: once through undervalued scrap deals, and again when sellable surplus material got scrapped instead of sold.

Why Phillips 66 Chose Liquidity Services

Phillips 66 did not run a competitive search for this solution. They came to Liquidity Services directly, because Liquidity Services was already managing their surplus asset sales and had built trust on that side of the business. No competitor was evaluated. They simplly asked if Liquidity Services could take on their scrap needs too.

Ease of service drove the decision. Phillips 66's refineries did not have the staff or the bandwidth to manage scrap contracts, vet vendors, or audit invoices site by site. They wanted one partner to run the process end to end and hand back clean, reconciled numbers every month, so their own teams could focus on the refinery, not the paperwork.

The Liquidity Services Solution

Liquidity Services built a scrap management reconciliation process tailored to each refinery's scope and needs:

• Assess the site. LiquidityServices evaluates scrap output, material type, and bin turnover frequency at each site, and whether the needs is a one-time project or a standing operation.
• Source qualified vendors. Using an established vendor network, Liquidity Services solicits competitive bids for scrap contracts, negotiates terms, and signs vendors on Phillips 66's behalf, replacing informal or outdated arrangement with vetted, priced agreements.
• Run the monthly reconciliation. Every month, Liquidity Services receives payments and load details from scrap dealers and collects Phillips 66 scale tickets from onsite reps, then verifies every ticket is accounted for in the dealer's payment. Pricing is checked against both contract terms and current AMM scrap market benchmarks. Any discrepancy triggers direct follow-up with the dealer or the Phillips 66 site contract.
• Audit continuously. Vendor performance and pricing are reviewed against the market on an ongoing basis, not just at contract renewal.

The Results

What started as a six-refinery engagement in 2014 has grown into a program spanning nine refineries and multiple mainstream sites across the country, including Alliance (since closed), Bayway, Lake Charles, Ponca City, Sweeny, Wood River, Borger, Ferndale, and Billings. 

The Borger Refinery came online in 2023 and has already delivered more than $270,000 net work Phillips 66. Liquidity Services' ongoing rate monitoring has also added measurable value at the Wood River refinery. 

Beyond the dollar figure, the program sharpened Phillips 66's ability to identify scrap surplus from trash at the point it matters most, before material ever leaves the site. That distinction protects both sides of Phillips 66's assets recovery strategy, not just the scrap side of it.

Twelve years in, the partnership is still expanding. Liquidity Services' current focus is growing the scrap vendor bench in harder-to-service regions and refreshing contracts that have aged past their useful pricing.

By the Numbers