U.S. Transportation Command (TRANSCOM) is responsible for the global movement of military personnel, equipment and supplies across the United States and around the world. It is also the largest shipper in the world of household goods (HHGs) for military families. Currently, TRANSCOM runs the Defense Personal Property Program (DP3) to manage HHG movements. This program relies on a disaggregated and inefficient system based on dozens of separate offices awarding individual contracts to hundreds of private transportation service providers (TSPs, or movers) for the packing, movement, storage and unpacking of HHGs. TRANSCOM is looking to modernize the DP3 by awarding a single contract for the end-to-end management of HHG movement and storage to a single commercial move team. Bringing the movement and storage of HHGs into the modern era will reduce costs to the Department of Defense (DoD), improving the quality of support for military families and even improve relations with private movers.
The movement of HHGs is both an expensive undertaking by the Department of Defense and a strain on military families. The DoD spends $2.2 billion for the movement and storage of approximately 600,000 shipments per year of HHGs for the military departments, defense agencies, and U.S. Coast Guard. Nearly half of these moves occur in the period between May 15 and August 31 creating a management problem and placing extraordinary demand on military families, transportation officials and private companies. This situation is further exacerbated by the current DoD approach to HHG movement and storage. DoD relies on 42 separate regional offices which, in turn, rely on approximately 900 TSPs. Management of these movers includes processes to qualify carriers, solicit rates, manage traffic, evaluate performance, pay bills, and settle claims.
Military families have to endure a change of stations every few years. A significant number experience problems including ill-trained and prepared packers and shippers, damage to their possessions and delays in receiving compensation for their property losses. Poor treatment during repeated moves can impact the willingness of military personnel and their families to remain in the military.
The situation appears to be getting worse. The 2018 military moving season has been characterized by some who had to endure it as the worst ever.
TRANSCOM has publicly acknowledged that the current system is not serving DoD, military families or even the movers well. In a letter to industry, a TRANSCOM official acknowledged that the current approach is not merely inefficient but inadequate to the needs of military families:
“Under the current construct we are unable to provide the quality capacity and accountability DoD customers deserve. An internal program review and a survey of decades of studies on the topic reveal three underlying issues: 1) quality capacity is lacking; 2) DoD has limited accountability measures to drive improvements, and; 3) Defense Personal Property Program (DP3) customers do not know who to call when things go wrong.”
TRANSCOM proposes to address problems with the DP3 by letting a Global Household Good contract provide for end-to-end management of the movement and storage of HHGs. To simplify management of the process, the new contract would be awarded to one private sector company or team. The goal is to create a single system with uniform standards, continuous global visibility of shipments and storage facilities and a single “button” that military families can press if they have a problem. This new contract would establish multi-year relationships with the TSPs that would support additional investment by the private sector and the creation of arrangements with trusted suppliers to meet peak demand. Long-term contracts with movers will also stabilize prices and reduce the overall cost of the program.
One reason to have confidence in the proposed solution is the experience of the British Ministry of Defense (MoD), which privatized the movement of military families’ HHGs. In 2015, the MoD awarded a team led by Leidos a 13-year, multi-billion pound contract for storage, distribution, freight and commodity supply services. One element of this contract is the Global Removals Management Service to manage the movement of MoD personnel’s HHGs both within the U.K. and internationally. This activity has achieved a 98 percent customer satisfaction rate while stabilizing relationships with movers and holding down costs.
Critics of TRANSCOM’s proposed solution erroneously characterize it as some kind of misguided attempt to privatize a government activity. But the current program is privatized. There are no government movers; all 900 companies used are commercial. The regional offices contract with the commercial movers on a transactional basis, one move at a time. This is highly inefficient and impedes TRANSCOM’s ability to provide sufficient capacity to meet the demand of the peak summertime movement period.
Establishing a global operating picture and consolidating the movement of household goods could be good for the hundreds of freight forwarders, packers and trucking companies. At present, the trucking industry is experiencing a downturn that is making it increasingly difficult for some of the smaller operators. Moving away from a transactional approach to HHGs will enable the government and movers to sign longer-term contracts. This, in turn, would allow the movers to seek commercial financing at more competitive rates, potentially reducing the risks of failure and bankruptcy. In addition, the single movement manager can coordinate assignments of work to the movers to minimize dead time.
TRANSCOM’s proposed Global Household Goods contract will be a win for DoD, military families, the movers and the taxpayers. By empowering a single manager to oversee the end-to-end packing, movement, storage and unpacking of goods, TRANSCOM can improve overall available transportation capacity, particularly during the peak movement season, while promising military families a better experience and improved customer support.
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