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The value of your Blue Book rating

Headshot of C. James Carr, President & CEO of Produce Blue Book.

Building a Blue Book rating is important. It takes approximately nine months for both a historical and predictive rating to be reported.

This allows time for trade feedback and predictive data to be gathered, examined, and reported. Firms are requested to provide a listing of references, noting with whom they deal, and to send their last two fiscal year-end financial statements.

Once a rating is established and reported, it can change depending on trade circumstances and feedback. Typically, a business identifies a trading and pay pattern it can sustain.

In other words, like an individual’s personality, firms operate in a defined, rather consistent manner, be that XX D or XXX B.

However, issues can arise, causing disruptions to the pattern of trade performance and ability to pay. In fact, almost all businesses find themselves in challenging times at one point or another. Hopefully, they are short-lived, but some can be life changing.

One company, in particular, comes to mind. When I joined Blue Book Services almost 40 years ago, that company had a XXXX AA rating. Due to business and personal factors, some of which were beyond its control, the rating plummeted, but thereafter, made a slow climb back to XXXX AA.

Truly unusual, but a fact. The owners and management could well have thrown in the towel; instead, they hung in there and rebuilt their rating. Did it take time and was it difficult? The answer is yes on both counts.

They came up with a plan and put a substantial amount of their own money into the business. This helped the company regain its footing and slowly re-earn the confidence of vendors.

These actions presented significant personal risk, but the owners did not want to cease business with unpaid obligations; they wanted to pay everyone and regain their own sense of credibility—and they did.

Quite a story for sure. This whole matter spanned several years and one generation. Taking uncertain and personally risky steps to make the company successful again took plenty of courage and fortitude.

In sum, building a business in the produce or transportation industry is difficult. Add the need to earn a rating and keep it as good as possible, and business becomes a real challenge.
However, if you choose to operate in these fast-paced, free market-driven industries, be prepared. What speaks to your character, ability, and credibility is the rating you earn and maintain.

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Jim Carr is the President and CEO of Blue Book Services Inc.