Advice on running FEMA loads
It’s that time of year again where unfortunate natural disasters bring in an abundance of FEMA loads that will keep many drivers busy through the summer months. Hurricane season officially kicked off on May 16 and it’s expected to be another busy one.
In 2019, the U.S. was met with six hurricanes and another 11 named storms that kept trucks moving to disaster zones for most of the season. 2020 is expected to be like last year with projections of 13-20 named storms and 6-10 of those being hurricanes. With this many expected storms, FEMA will need to lean on the transportation industry to ensure supplies make it to those in need. If it wasn’t for trucking companies FEMA wouldn’t be able to get the water, ice, medical supplies, generators, and more other needed supplies to the disaster areas.
About Running FEMA Loads
Running FEMA loads go a long way in helping the recovery effort when natural disasters bring destruction to 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 cash flow due to extra delays, longer wait times to unload, and other potential challenges.
These high paying loads are very attractive, but it will require extra caution to ensure that the invoice can be 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 loads you may have spent weeks working on and that are paying anywhere from $5k to $20k or more.
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 certain they can factor the FEMA load without delay. As you head into a disaster zone, safety should be the #1 priority, so make sure 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 anything 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 that they have 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 on those funds, but we also need to ensure we’ll get paid the full amount agreed to in a timely matter. Most FEMA loads you book will be through freight brokers with standard net 30 payment terms; however, since FEMA loads are government contracted, you can imagine the government is not paying as quickly as we’d all prefer. It’s understandable with the chaos that is disaster relief and the tens of thousands of 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 are paid by the government.
Unfortunately, OTR cannot wait an indefinite amount of time to receive payment so we will not be able to immediately purchase invoices that are paid when paid. It’s important for you to always confirm the broker will have standard pay terms.
Detention Pay Is Important
Usually, the big hold upon payment is the extra detention pay. After a major hurricane (category 3-5) we regularly see detention pay skyrocket to $750 – $1,500 a day. When we run into 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. Due to some of the issues we’ve experienced with the large detention payments, OTR will always require written confirmation that the detention is finalized and 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 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 for freight factoring with us to receive all of our benefits to help with running FEMA loads. OTR Solutions uses the best true non-recourse factoring program out there with several innovative tools for truckers including our fuel card for truckers, the capital fuel card because we know how funds can be slow during FEMA runs.