One of the best defense logistics programs you probably never heard of is called Theater Express. This is a program begun in 2006 under which the military uses commercial airlift to move non-sensitive cargoes to recipients throughout the Central Command (CENTCOM) area of responsibility, including Iraq and Afghanistan. The idea is to leverage both available cargo aircraft but also the superior supply chain management of private sector companies to free up military aircraft for more critical shipments while simultaneously reducing costs. The use of commercial airlift also helps the military to reduce the use of ground convoys which are subject to extortion and even direct attack. The Theater Express program is now delivering 30 percent of all air shipments to U.S. forces in Afghanistan.
Theater Express is the quintessential example of the power of the collaboration between the public and private sectors to provide the warfighter with critical supplies. On the government side it is a collaborative effort between Central Command, U.S. Transportation Command, the Defense Logistics Agency and Air Mobility Command. On the private side, five commercial carriers (Air Transport International, UPS, National Air Cargo, FedEx and Evergreen) compete for each shipment.
Theater Express is an amazing example of what can happen when the government leverages the core competencies of the private sector and uses commercial best practices. The competition to deliver cargoes is based on a straightforward commercial metric: price per pound. In addition, there is a performance-based standard. The winning bidder is required to deliver the cargo within 72 hours at least 85 percent of the time. Each commercial carrier provides high quality, redundant in transit visibility. While improving delivery of supplies and reducing demand for military airlift, Theater Express saved the Pentagon almost $1 billion in 2009 alone.
The success of Theater Express raises serious questions about the need to reform other parts of the military’s logistics and transportation system. For example, given the exemplary track record of private carriers such as FedEx and UPS in moving packages and supporting the Post Office why not privatize the entire military mail system? If private carriers under the Theater Express program can reliably deliver supplies to Afghanistan in 72 hours and at a cheaper price than what the military can achieve, why is delivery of mail by the military the exception? In an era of fiscal austerity, this makes no sense.
More broadly, Theater Express is an example of the power of right sourcing logistics. The military remains responsible for the movement of sensitive cargo and being the carrier of last resort. The private sector is engaged to take advantage of its commercial best practices, supply chain experience and cost cutting methodologies to move non-sensitive cargoes. This is a true win-win for right sourcing.
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