Thursday, September 29, 2005

FEMA Fiscal Responsibility

No bid contracts, little accountability. Yep, FEMA is spending our money responsibly.

In response to reports that FEMA may be paying up to $4-$6 per mile and taking equipment out of the available carrier base, IARW [International Association of Refrigerated Warehouses] conducted a quick survey of members to see just how serious and widespread the problem might be.

One member, who contacted all his major carriers to inquire about the FEMA issue, found that over half of them were called by FEMA and asked to commit resources. As of five days ago, none of that equipment had been diverted to the FEMA program. He reported, however, that brokers with whom he regularly works are having difficulty, as their carrier base, the owner-operators, were accepting FEMA offers.

An East Coast member reported hearing the pay is $4/mile, plus hefty layover pay. They have been finding it difficult to hire owner-operators on a regular basis, especially in the past few weeks, and especially in Florida and the mid-Atlantic. He thinks carriers may have been pulling ice to the hurricane areas and in some cases paid to layover until the ice could be distributed.

After Katrina and just prior to Rita, another member reported that carriers were already at a premium in both the Southeast and Midwest. This member said that over 100 trucks had been sitting at an Air Force base outside of Montgomery, AL waiting for directions. It was said that they were being paid $600 a day to sit and wait.

Another member who is feeling the hurricane impact agrees that FEMA and others are paying considerably more in freight rates to secure trucks, particularly in the South. This member heard that FEMA may be paying up to $1,500 per load, when a normal rate would be $600. He is seeing truck shortages throughout the industry and is unsure when the carrier base will return to normal.

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