Nearly two months after Hurricane Katrina hit the Gulf Coast, some small trucking companies and a subcontractor say they face financial hardship because of delayed or inadequate payments for their work supplying and delivering water and ice to the stricken region.
Maggie Lee, of Double Wing Trucking in Seattle, said one of her company's five refrigerated trailers was repossessed recently because she missed a payment after not being paid $25,000 by a Florida broker working for Lipsey Mountain Spring Water. Omar Singh, of Jando Trucking Inc. in Herndon, said he is owed nearly $50,000 by the broker, Harold L. Bibby of 4 Points Logistics LLC, for five loads of ice his refrigerated trucks hauled from Providence, R.I., to Louisiana last month.
The Owner-Operator Independent Drivers Association Inc., a group that says it represents more than 130,000 small truckers, filed a suit over the issue against 4 Points and Lipsey yesterday in federal court in Florida. It charged the two companies with "systematic efforts . . . to profit from the premium prices" paid by the state of Florida and "to deprive drivers of the rightful compensation to which they are entitled."
Bibby, the truck broker, said in an interview last weekend that he could not pay the truckers because Lipsey had paid him only $1 million of a total bill of about $7 million. Bibby said yesterday that Lipsey had paid him about $3 million more yesterday afternoon and that he, in turn, would be overnighting payments to the truckers he owed.
Joseph Lipsey III, president of the water company, said yesterday that he has not seen the suit but that he thought the trucking group had "no claim against us."
The Norcross, Ga., businessman holds major contracts with the state of Florida and other Gulf Coast states to deliver water and ice in disasters, as well as the main federal contract to deliver bottled water. The lawsuit is based on complaints over payments on the Florida contract.
Truckers who carried loads of ice and water to the storm region were in the spotlight recently when several complained about being sent as far as Maine to find storage facilities for unused ice. The time they spent waiting on those trips is one of the areas of contention in some of the billing disputes.
Kelly Rhinehart, president of Idaho-based TRC Inc., which operates truck stops and convenience stores, said it is not just truckers who are having trouble getting paid. He said Lipsey owes him nearly $4 million for his work as a subcontractor who arranged with suppliers of ice and water to make shipments after Katrina.
Lipsey said problems with the invoices submitted by both Bibby and Rhinehart have delayed their payments.
Spokesmen for the Army Corps of Engineers, which oversees Lipsey's federal contract, said the agency has heard of no complaints about lack of payments. A spokesman for the Florida Department of Agriculture and Consumer Services, which awarded the Lipsey ice contract, said officials there were aware of the dispute but were taking no action since the company had fulfilled its contract with the state.
Bibby's Web site lists dozens of trucking companies that have not been paid for Katrina trips. It says they "can't be paid until Lipsey sends payment," citing what he described as "the amount of paperwork involved and the slow speed at which Lipsey Spring Water has been approving invoices."
Bibby said the delayed payments -- and now the lawsuit -- have hurt his business. "We were hoping this was going to be a great year. Now it looks like the disaster from Katrina is rolling back to us," he said.
Payment for waiting time is part of the dispute between 4 Points and some of the truckers it hired. Singh, who has eight refrigerated trucks, said he agreed to ship ice for Bibby in part because the contract offered $3 a mile, above the industry norm, along with $60 an hour for waiting time.
But Singh said that while waiting time is typically paid for 24 hours a day, 4 Points was refusing to pay at that rate, which would be $1,440. One Jando truck drove from Providence to Metairie, La., with nearly 50,000 pounds of ice, Singh said, arriving Sept. 5. It then was told to move to Hammond and on to Slidell, La., before it was unloaded Sept. 10. He billed at the $1,440-a-day waiting time rate but has not been paid in full, he said.
Bibby sent a notice Sept. 22 addressed to carriers hauling loads of Lipsey ice and water, saying there was a cap on waiting time of 10 hours a day, meaning the most he would pay was $600.
The waiting time issue is cited in the truckers' suit against 4 Points and Lipsey's company.
Bibby attributed part of his predicament to the large workload that accompanied Katrina. He said his brokerage, used to handling 100 truckloads a week, was suddenly doing 100 a day and did not have the staff to process the paperwork quickly. He said truckers "think brokers are an ATM machine" and need to be patient.