In the latest edition of the Australian Institute of Credit Management (AICM) Magazine, Lockton’s Sam Rodda unpacks the growing challenge of tariff volatility for trade creditors. With Australian insolvencies up 43% year-on-year and global trade disruptions escalating, businesses can no longer afford to take a passive approach to credit risk.
If you haven’t already, we also recommend reading our previous piece: How Trade Credit Insurance Can Protect Your Cash Flow (opens a new window)- a practical guide to understanding the core benefits of TCI for businesses in uncertain times.
In this AICM article, Sam outlines five practical steps credit professionals can take to safeguard their organisations - from reassessing supply chain exposure to rethinking their insurance strategy.
Key takeaways:
Understand your tariff exposure: Begin with identifying which customers depend on tariff-sensitive goods or supply chains. Asking the right questions can reveal hidden vulnerabilities before they become payment risks.
Look beyond profitability and focus on cash flow: Tariffs often destabilise cash flow more than they affect margins. This increases the risk of delayed payments or defaults even from otherwise reliable customers.
Stress-test your customer base: Incorporate scenario modelling into your credit assessments to forecast what happens if tariffs are imposed (or lifted). Could a key customer absorb cost increases, or would they default?
Revisit your insurance coverage: Tariff-related disruptions can trigger missed payments, supply delays, or revenue losses. Sam explains how trade credit insurance and business interruption policies must evolve to meet today’s risk landscape.
Keep the conversation open: Engaging customers in proactive dialogue about tariff impacts helps preserve trust, adapt terms, and flag early warning signs before issues escalate.
Real-world impact:
The article features a case where a Lockton client - a plastic container manufacturer - faced a significant loss when a major buyer went insolvent. Thanks to pre-shipment cover secured through Lockton, 90% of the loss was recovered, turning a potential crisis into a manageable event.
Download the full article
Whether you're navigating global trade uncertainty or re-evaluating credit risk in light of rising insolvencies, this article offers essential guidance for staying resilient in today’s unpredictable environment.
To access the full article, click the download button (located on the right for desktop users and at the bottom for mobile users).
Contents of this publication are provided for general information only. It is not intended to be interpreted as advice on which you should rely and may not necessarily be suitable for you. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. Lockton arranges the insurance and is not the insurer. Any insurance cover is subject to the terms, conditions and exclusions of the policy. For full details refer to the specific policy wordings and/or Product Disclosure Statements available from Lockton on request.
