This is a question that we hear frequently at Red Book Credit Service. I guess I would start by saying that RBCS (and any other credit service) is only as good as the information we receive. We appreciate the fact that the produce industry takes the time to answer our ratings department's calls for credit information and fills out our questionnaires.
We like to think of ourselves as a clearinghouse for information. We collect it, we collate it, and we give it back to our members in the form of ratings, as well as written and verbal reports. We require at least eight to 10 references from a company in order to assign a rating. We also require that the company be in business for at least six months before a rating can be assigned. Our ratings department is on the phone all day every day making calls and soliciting rating information on all of the firms that we list in Red Book and the Transportation Brokers Ratings Directory. RBCS makes more than 12,000 ratings calls each and every month to the industry.
We are looking for different types of information on each firm that we list. On a shipper, for instance, we are concerned about quality of their product, having it ready to be loaded when the truck arrives, etc. With a receiver, we try to determine if they are fair or if they claim against every other load that arrives at their dock. How do they pay? With a truck broker, do they stand behind the carrier if there is a problem? Do they hire knowledgeable drivers with good equipment? How do they pay their trucks? And, with carriers, do they generally pick up and deliver on time, or are they perpetually late? Do they run good equipment and employ good drivers? This is the type of information we generally seek when looking for a rating.
What happens once a company is rated in Red Book or the Transportation Brokers Ratings Directory? It is printed in the next issue of the Newflash/Bulletin and/or Trucking Update. It will be updated on our new CD-ROM. Once it is printed, we do not forget about it and move on to another company's file. Our files are in a constant state of revision. We update, on a daily basis, credit profiles on companies who have been rated. Given this fact, we advise our members that the ratings in the books are designed to help give you some idea about the firm with whom you are considering doing business. These ratings are not designed to be the ultimate deciding factor on whether or not you deal with someone.
We strongly encourage our members of both of our directories to call us and get a complete verbal or written report, or access the information on our CD before dealing with a new account. Many of our customers call several times during the course of the year and check out existing accounts. When a customer calls for report, the information provided will generally consist of background, ownership, financial information (if available), credit amounts extended to the company, when those reports were received by RBCS, and how many days on average the company pays its suppliers and service providers. This information can be provided verbally or by written reports when requested. One important thing to remember when looking in either of our books and finding a firm who is not rated is that this does not mean that we know nothing about this firm. It simply means that we do not have enough information to establish a rating. Call and check on these accounts anyway. If they are listed, we know something about them.
Finally, when a written complaint is received, it is entered into our computer system and immediately becomes part of that company's credit profile. While one complaint usually does not change a company's rating, it could if it were well documented and of a highly serious nature. Obviously, there are two sides to every story, and sometimes our research proves that the person lodging a complaint may have very eloquently left out a few details, which could cause the entire situation to be reversed. We do a lot of checking and verification in order to determine what is actually a valid complaint and what is a dispute.
We look at our ratings as trends. If a receiver has a tendency to kick every other load that arrives at their dock, they are going to have a rating problem with us as well. If the type of complaint that we receive revolves around slow pay, it is rare that we receive only one. Usually, if a company begins to slow down on pay, it is a trend experienced by most or all of that firm's suppliers. Most importantly, when a valid complaint is received by RBCS, it alerts us to a potential problem account. In many cases, where there is smoke, there is fire. A single complaint, coupled with our investigation, can quickly warn our members of a business that is in trouble. Our job is not to notify our membership that someone filed Chapter 11 bankruptcy, but to help our membership avoid being involved in it.
If you have information that you think we need to know about someone with whom you're doing business, don't be a stranger. Call us, e-mail us, write to us, or fax us, but let us know. Even if you are not a member of either of our services, we want to hear from you. We are only as good as the information we receive. Our knowledge and reporting, coupled with your information, can form a powerful partnership.