Advice on running FEMA loads
It’s that time of year again where natural disasters ramp up, bringing in an abundance of FEMA (Federal Emergency Management Agency) loads that will keep many drivers busy through the summer months. Hurricane season officially kicks off on June 1 and rush through November 30, peaking between August and October. Hurricane Beryl made landfall in Texas, signaling a strong season ahead.
In 2023, the U.S. was met with seven hurricanes that kept trucks moving to disaster zones for most of the season. NOAA expects an above-average 2024 season with 17-25 named storms, and 8-13 of those to be hurricanes.
With many expected storms, FEMA will need to lean on the transportation industry to ensure supplies make it to those in needs. If it wasn’t for trucking companies, FEMA wouldn’t be able to get the water, ice, medical supplies, generators, or other necessary supplies to the disaster areas.
About Running FEMA Loads
Running FEMA loads goes a long way in helping the recovery effort when natural disasters hit a community, but it’s incredibly important to make sure you’re compensated properly for your time. Trucks are desperately needed for disaster relief, but these hauls can strain your cashflow due to extra delays, longer wait times to unload, and other potential challenges.
This is where OTR Solutions comes in. We’ll get you paid quickly with BOLT, ensure you’re running with credit-approved brokers, and handle any payment delays with the broker. These high-paying loads are very attractive, but it will require extra caution to ensure that the invoice can be properly factored and that you’re properly compensated.
Take advantage of what OTR can do for you. Our services are even more important when it’s for FEMA truck loads that you may have spent weeks working on and that are paying anywhere from $5k-$20k more.
Stages of FEMA Load Running
Freight movement is affected in three stages: before, during, and after a detrimental storm.
- Before: Truckload rates spike as shippers rush to move freight in and out of the anticipated affected area. FEMA begins to import emergency supplies to the area before the storm makes landfall.
- During: Nothing moves in or out of the affected area during the storm. FEMA continues to deliver emergency relief supplies to places just outside of the storm’s path.
- After: Inbound emergency relief supplies are shipped in at a high rate. Vans and reefers tend to ship first, followed by flatbeds with reconstruction materials. Shippers in the affected area will most likely have a backlog of orders, prompting a high outbound demand for carriers.
Stay Safe and Be Prepared
Carriers will need to be aware of a variety of conditions to make sure they stay safe and to make sure they can factor the FEMA load without delay. As you head into a disaster zone, safety should be your #1 priority, so make sure you and your drivers are prepared. Drivers can run into multiple challenges on the way, including:
- Damaged Roads
- Spotty Cell Service
- Closed Truck Stops
- Closed Grocery Stores
Be prepared, stay organized, and be patient for the best chance to keep these loads hassle-free.
Keep Clear Records of Agreements
In this industry, it’s always important to get information in writing, but it’s essential when taking a FEMA load from a broker. With the high detention pay and with the time it will take to complete, get all agreements in writing so you have clear records to reference if needed. Disaster relief can be hectic, and you don’t want any important details to slip through the cracks. Make sure you keep a detailed record of all agreements discussed. Here is a list of things to pay attention to, so you can avoid any disputes with the broker:
- Cost You’ll be able to charge more on these loads. Consider the time and costs and ask for a higher rate.
- Waiting Time Keep a detailed record!
- Miles You’ll see great rates per mile, but don’t forget it’s unlikely you’ll get a load out. Factor in the empty miles on your way out of the disaster area.
- Detention and Layover Pay Include it on the rate agreement and remember it could take a while to get unloaded.
- Rate Con Review to confirm standard terms and any other important information.
Read over the rate con carefully, making sure to have detention pay included and confirm the broker has standard pay terms. Reading everything thoroughly and getting it in writing ahead of time will make the factoring process much easier once you’re ready to invoice.
Loads Can Get Paid Slower
OTR is here to make sure you get paid quickly once the job is complete! It’s important to us that you don’t have to wait any longer for those funds, but we also need to ensure we’ll get paid the full amount agreed to in a timely manner. Most FEMA loads you book will be through freight brokers with standard net 30 payment terms; however, since FEMA loads are contracted through the government, you can imagine the government isn’t paying as quickly as we’d all prefer.
It’s understandable with the chaos that is disaster relief and the countless loads being run for the government over a few months that there will be delays, but it’s still important that you and OTR are paid on time. Since the customer, FEMA, can pay out slowly, these loads are sometimes paid when paid, meaning the broker won’t pay the carrier/factor until they’re paid by the government.
Unfortunately, OTR cannot wait an indefinite amount to receive payment, so we will not be able to immediately purchase invoices that are paid when paid. To try and avoid this, it’s important for you to always confirm the broker will have standard pay terms.
Detention Pay Is Important
Usually, the big hold up on payment is the extra detention pay, which accounts for the time a trucker spends waiting for the customer to load or unload their truck. After a major hurricane (category 3-5), we regularly see detention pay skyrocket to $750-$1,500 a day. When we see payment issues on FEMA loads, it’s often because the detention is in dispute – this is why it’s so important to have detention on the rate con and keep any discussion over detention in writing.
OTR will always require written confirmation that the detention is finalized, and that the amount is correct. Getting everything in writing will go a long way when you’re finalizing the rate with the broker and trying to get funded. We’ll require written verification from accounts payable on the rate/detention and we’ll need to confirm the payment terms. If you’re working with a good broker and everything has been communicated correctly, this shouldn’t be an extra obstacle.
OTR is Here to Help
No one wants a natural disaster to strike, and it’s incredibly unfortunate for so many Americans, but it does create an opportunity for carriers to help those affected while also making good money. If you choose to run FEMA loads during the hurricane or wildfire season, be prepared and stay patient. These loads might not go as smoothly as you’re used to, but they can be worth it, and OTR will do everything to get you funded as normal.
If you have any questions or expect to regularly run disaster relief loads this season, please reach out to your account manager. If you aren’t with OTR Solutions yet, please apply to factor with us to receive all our benefits that help you run FEMA loads. OTR Solutions uses the best true non-recourse factoring program in the industry with several innovative tools for truckers including our industry-leading fuel card, because we know how funds can be slow during FEMA runs. If you aren’t working with OTR Solutions yet, explore our factoring services and additional resources to help you run FEMA loads as smoothly as possible.