Bottom Line
Don’t feed the sharks
Truckers who run a load without first running a credit check are asking for trouble

By Terry Scruton
Senior Writer

Richard Kershman has been paid for every single load he’s hauled in the past nine years.

“We’ve had a couple of close calls,” he said. “But we haven’t lost a nickel out there.”

Kershman, an OOIDA member who does business as Chino Trucking out of Oklahoma City, said he owes his success to using a reputable credit-reporting agency. He said it’s important for owner-operators to know exactly who they are dealing with.

“These brokers can song-and- dance you all they want to,” he said. “I don’t see how you can stay in business anymore in this day and age without being part of a credit-reporting service.”

There are several major credit-reporting companies that offer services for the trucking industry. Kershman uses Compunet Credit Services Inc., Lake Havasu City, AZ. There are also two other major players: Red Book Credit Services and RTS Credit Services, both based in Lenexa, KS.

Randy Gunderman, manager of RTS Credit Services, said that with so many brokers and so many new ways for truckers to find brokers – such as the Internet – it is more essential than ever for truckers to do a credit check on a broker they are unfamiliar with.

“There are all kinds of brokers out there,” he said. “There are good ones, bad ones, those that are underfunded and those that are fairly new to the business. And they start out with every good intention. But then they get caught in a claim or someone doesn’t pay them, then immediately they have cash-flow problems. They don’t have very deep pockets.”

And of course, Gunderman added, there are the worst brokers of all.

“There are brokers out there who are just crooks,” he said. “There’s no other way to put it. They’re out there to rip off these truckers. We’ll tell you who they are.”

How does credit reporting work?
Each credit-reporting agency has its own methods for gathering information on brokers and shippers. Typically, they rely on several sources for their information: references and reports from the companies that deal with the brokers and shippers; aged accounts receivable information submitted by companies that deal with the brokers and shippers; and financial reports issued by the brokerages and shippers themselves.

Some companies gather information from other businesses owned by their parent companies. RTS, for example, has a sister company, RTS Financial, that buys unpaid invoices from carriers and advances them cash in exchange for a percentage of that invoice, essentially managing the cash flow for the carrier. 

RTS Financial then sends the invoice to the broker and begins tracking the payment at that point. That payment information – how long it took, how the payment is made – is then entered into the RTS Credit database, where it can be accessed by RTS customers.

Customers can access the information in a variety of ways. Most credit- reporting agencies have Web sites with searchable databases that can be accessed for a fee – either a yearly or monthly membership fee or a smaller fee for individual searches. Compunet, for example, charges $7.95 for each credit check.

Credit checks can also be received by fax or phone, and many companies offer e-mail alerts and updates based on customer requested information. Some companies are also starting to offer that same information in messages sent to mobile phones. 

Some companies also offer printed versions of their credit rating information. Compunet offers the Gold Book every other month. It is a list of 1,000 brokers who pay their freight bills in 30 days or less. Red Book Credit Services offers the Truck Brokers edition of its Red Book Credit report, which is updated and published twice a year.

Cost vs. benefit
Some truckers may not use credit services because they think they are too expensive. But Greg Conklin, sales manager for Compunet, said that expense is negligible compared with the alternative. 

“The average profit margin of a trucking operation is 6 to 10 percent,” he said. “What it comes down to is if somebody doesn’t pay you, you’re probably going to haul about 16 or 17 loads to make up for the one that didn’t pay.”

Chuck Curl, ratings director for Red Book, said that losses from unpaid loads could add up to thousands of dollars.

“Let’s assume that a trucker pays $300 a year to us for credit information and can determine the creditworthiness of firms and decide who they want to do business with,” he said. “If they pay $300 for credit information, and save themselves $4,200 on one load, it can save them thousands and thousands of dollars.”

Gunderman said using a credit- reporting service is one of the best insurance policies a trucker can buy.

“A load is going to pay $1,500 to $1,300 on average,” he said. “So ask yourself, what is a load worth compared to $300 a year? It’s about the cheapest, most inexpensive insurance you can get. With fuel the way it is, the people who use (a credit service) know they can’t afford to be without it.”

Bill Ryan, president of RTS, said he tells truckers who say they can’t afford a credit report that they really can’t afford not to get one.

“Sometimes, they can’t afford to pay very much for a credit lookup, and consequently they don’t look these guys up,” he said. “They are flying by the seat of their pants, and it’s simply a matter of chance if they are going to get bit or not. Unfortunately, a lot of them do get bit, and this puts a lot of these smaller truckers out of business.”

When should I use a credit service?
Gunderman said the best way to use a credit service is to check every broker you are unfamiliar with before you agree to haul a load. He added that it is equally important to check even those brokers you are familiar with on a regular basis, especially now that the Internet has come into the picture.

“The Internet has made a big difference in this industry,” he said. “Now these guys are finding brokers they’ve never heard of before. We give them a way to check someone out instantly. And they can recheck them again in a week or a month. We think you need to check often and everyone so that you don’t get burned. The ratings change so fast on some of these guys.”

From a driver’s point of view, Kershman said that some load boards out there offer credit- reporting services, but he wouldn’t swear by them. 

“They were showing (some of the brokers) to be good people,” he said. “But about six of them were on Compunet for not paying freight bills.”

Kershman has two words for any trucker who doesn’t use a credit-reporting service: “Hello, sucker!”


Who are these guys?

The top three credit services and what they do

There are three major players in the credit-reporting business: Compunet Credit Services Inc., Lake Havasu City, AZ; Red Book Credit Services, Lenexa, KS; and RTS Credit Services, also of Lenexa, KS. Here’s a brief look at the services they provide.

• Credit reports – online (, via fax or live operator;
• “The Gold Book” – every-other-month listing of approximately 1,000 brokers who pay in 30 days or less;
• The Compunet Bulletin – a monthly listing of companies who have been reported to Compunet for nonpayment, including brokers, shippers and agents; 
• Accounts receivables reviews offered free to subscribers; and
• Receivables monitoring – to track changes to credit reports previously checked.
Credit reports are available for $7.95 each for members and $25 for non-members. Call 1-800-872-3748 for more information.

• “The Red Book” – a credit listing of shippers, growers and receivers in the produce industry as well as trucking and brokerage firms dealing with the produce industry;
• The Truck Brokers edition of “The Red Book” – which focuses exclusively on credit ratings for truck brokers; 
• – The Produce Industry Credit Council; and
• – Broker listings and credit ratings for truckers who haul produce.
The cost of Red Book services varies, depending on what the customer wants. Prices range from $150 a year to $1,500 a year. Call 1-800-252-1925 for more information.

• Online, searchable credit report database rating brokers and shippers (;
• Customized credit alerts via e-mail or fax; 
• Interactive features that enable members to rate and comment on companies online; and
• A favorites feature that enables users to file and keep up to date on brokers they use more than once.
The cost is $299 per year or $35 per month, with unlimited access for both. Call 1-800-860-7926 for more information