When Red River Logistics partnered with Euler Hermes, it already had an efficient in-house credit process but saw the opportunities that came with adding a second layer to the process and leveraging Euler Hermes’s financial insights and the protection that comes with the insurance policy.
“If the customer looks financially viable, we allow them up to our deductible, and after that, we know it’s time to engage Euler Hermes,” says Sanders. “We do that a few times a week. It’s been a tremendous value.”
Sometimes, Euler Hermes provides information about a potential client and advises that Red River Logistics pass on the opportunity. Sanders suspects this is what would have happened had Red River Logistics had a policy in place before they took on the client who filed for bankruptcy. Since Euler Hermes has access to a robust set of financial data and market insights, it would have likely flagged the company as high risk.
“Euler Hermes would’ve saved the day had we already engaged them,” says Sanders. “Now we live by whatever the risk stance is. If they say no, then it’s a no.”
In addition to Euler Hermes’s financial insight, Red River Logistics also uses the CAP program to evaluate and insure high-risk clients on top of the company’s primary policy. CAP coverage allows Red River Logistics to purchase additional coverage on many limits that have been fully or partially declined—something that may happen with riskier clients.
Euler Hermes helps Red River Logistics assess whether the new client is strategically worth the sale, in which case Red River Logistics can mitigate the risk with CAP coverage, or pass if it’s not the right fit for Red River Logistics at the time.
“When we find out a client needs that type of coverage, it’s great guidance for us,” says Sanders. “With Euler Hermes, we can ask ourselves if the sale is something we want to pursue or not.”
Since transforming its credit process with Euler Hermes, Red River Logistics has had no more surprises. It knows both when to pursue clients and when clients are not a good fit. Red River Logistics’ trade credit insurance policy provides the support and knowledge it needs to avoid losses from the start.