Extending Credit and DRC Membership – Note from the President

The DRC recently terminated the membership of a firm for failure to provide us with information requested due to reports of lagging payments. We want to share with you what can happen when good credit principles are not applied.

The terminated firm was a DRC member for just over six months.  Past due payments were brought to our attention and, as is our usual practice in such instances, we followed up directly with the firm.  We requested additional information with a hard deadline.  Following the letter, multiple payment issues were reported to us and the firm failed to provide us with the requested information. This resulted in termination of their DRC membership.

Over a three-month period, this new firm was granted in excess of one million dollars in credit (that we know of) by a handful of shippers and transportation firms. Several of these firms have reported extending credit well into six figures.   It is now May and the shipments go back to February.  We sincerely hope payments will be made, however the odds are against it. In several cases we know of, although the seller had good credit limits in place, a trusting salesman confirmed the sales on promises that the cheque was in the mail.

How do you monitor your credit limits and reduce your risk of this happening to you?  Check their rating with BlueBook.  Do not bite on the sale until previous cheques or payments have cleared.  Take your time establishing the relationship.  Assume that if the new purchaser is buying large volumes from you, they may also be buying similar volumes from others.  Call around to the people in your network.  If you are new to the business or industry and don’t have a strong network yet, join a local or regional produce association and take part in their social/networking activities.

While the DRC is not a credit rating agency, we do see what can happen when credits limits are not set and enforced.   Don’t just check for a DRC membership, call our office and find out how long the firm has been a member, how long they have been in business, and if they have any previous industry experience.

If you’re new and still need help figuring out good credit practices and policies, call us and our staff can help get you started. If you have been around for a while, don’t forget to review your credit policy from time to time and keep up with your training of new key staff.


Members should always check with the DRC office about any potential implications of possible business relationships with individuals who have been responsibly connected to members who have been terminated or expelled from the DRC or had their license cancelled or suspended by the CFIA.

Verified by MonsterInsights