If you work in the transportation industry you know things don’t slow down, freight does not wait for a committee meeting, most decisions are made in real time as situations develop, and the pace is faster than many other industries. Conversely, if you are familiar with the normal insurance industry you know things move dreadfully slow and there seems to be nothing you can do to inject urgency into anything. If you wish to see an underwriter experience a panic attack put them in a position they have to hurry. These two stark differences often make me wonder why I do what I do for a living. Maybe I should try something different. Maybe I will buy an indoor tanning salon? How about a food truck? The ‘umbrella guy’ job at the beach looks pretty awesome too.
Since transportation does move fast sometimes deals originate, close, and the freight starts moving before the paper work catches up or the sun sets on the day, having credit is sometimes paramount. We give terms to many companies as a matter of course as a reality of doing business and we expect terms. I would prefer every business in the world send me a check today which I will deposit in escrow. This way if the company ever needs to arrange cargo insurance for an import or an export, I will already have their money and provide the cargo insurance. It would be sort of a global pre-pay.
Because every business in the world has not prepaid as of yet, as I mentioned we sometimes offer terms. We measure the decision of offering credit using business reputation, credit check, or sometimes a company will be referred to me from someone I trust which carries the most weight. One such referral instance came from a west coast insurance broker we know who supplies everyday insurance for truckers. The broker is a good broker and has good people. Every so often one of their trucker clients will run into a shipment of freight of high value. That’s when they give me a call.
Contract truckers often times carry $100,000USD or more of cargo insurance as a part of the transport. The law requires at least that level for contract carriers. There are occasions the trucker comes across a load that may be valued higher than normal which is picking up that day or the next day. The trucker is faced with the task of requesting a rider from their everyday insurance company. If the high value freight shipment happens to be short notice, that’s when the trouble starts. When values get to be high, insurance companies want to be able to measure their risk before agreeing to accept that risk and calculate the premium for it. If the freight picks up same day or early next day, the trucker is at risk to miss the opportunity to carry the freight as their insurance company may be unable to process the request fast enough to keep up with transportation schedules.
Low and behold the purpose of what’s called a ‘forwarders policy’. The existence of forwarders policies is a direct result of the operational time difference of the two involved industries of insurance and transportation. In the case of transportation professionals the law allows them to possess a forwarders policy, purchase and issue cargo insurance certificates within defined parameters as needed from the policy, cover their customer’s shipments with insurance, and then re-sell the certificate to their customer at a profit if they wish. One of the primary functions of our company is to arrange and support freight forwarders policies for freight forwarding and 3PL professionals. Of course we also maintain a house policy for our company to use as needed.
One such occasion of using our house policy came some time ago. Our broker friend from the west coast referred a trucker to us that had a few high value shipments sitting in their lap and no insurance to cover the high excess value. As a matter of course we quoted, closed the sale, executed and filled the cargo insurance needs of the trucker, the freight picked up, they thanked us for bailing them out, we produced invoices for the carrier to remit payment, and they have been dodging us ever since.
Why did I think of this Texas based carrier? One of the main contacts from the carrier actually forgot her employer shafted our humble company and reached out to connect with me on LinkedIn this week. Since things like not being paid stick with me, I recognized Jennifer’s name as well as her employer in an instant. No worries on third party disclosure, there is no fair collections act in business to business collections. At this time I am not mentioning the company’s name and location as a courtesy.
I accepted Jennifer’s invitation to connect and sent an immediate message back to her stating I was pleased to connect with her and did it mean her company was going to pay their bill? You will be stunned to learn Jennifer did not reply back to me. The amount of debt not being paid did not put us out of business, make us tap into our credit line, or impact our normal operations. Although being stiffed does remain a thorn in my side which irks me beyond what most would consider reasonable. I am so irked by bad debt starting a four years ago I stopped writing it off just so I would stew even harder. Yes, every penny of bad debt owed to my company has been riding the books since 2011 and I like seeing it.
Jennifer’s invitation created a quandary for me of whether LinkedIn was the proper format to ‘out’ those companies who do not pay their bills? The same logic can be used for Twitter and Facebook. I in no way intend to harass slow payers in a public forum. Slow pays come for distinct reasons and can be worked through. I have knowingly carried some customers through hard times and would do so again for a few. But the allure of releasing accurate, factual, documented bad debt information, and request for payment, on deadbeat companies on social media is undeniable. Shaming has been used quite often on a people to people basis on social media, what about tasteful business to business shaming within the site’s guidelines?
Here is where I am going to give a free plug to a company that is not paying me to do so. I know, hard to believe. Freight Deadbeats.com (www.freightdeadbeats.com) is a collections firm that specializes in freight collections bad debt. On a regular basis they publish a list of their current ‘freight deadbeats’ and I receive, and read, the e-publication on a regular basis. The legality of being able to publish business to business collections is unquestionable. Freightdeadbeats.com releasing deadbeats names sounds like a smart business tool. Whether releasing bad debtor’s information in social media is reasonable behavior is another question.
Will I release collections data on to our LinkedIn, Twitter, and Facebook pages and list those who have committed theft of services/products through nonpayment? I am going to give some thought to doing just that. Posting open accounts on a weekly basis may or may not spark a company to remit payment, but it very well may save another company from being the victim of a bad faith transaction. If you have an opinion on social media collection efforts I would love to hear it.