Military Cargo Routing:

Allocation of Port Handling Costs

NSIAD-88-148: Published: Apr 27, 1988. Publicly Released: Jun 1, 1988.

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In response to a congressional request, GAO investigated an ocean carrier's allegations that the Military Traffic Management Command (MTMC) improperly allocated port handling costs to determine the: (1) appropriateness of the cost allocations; and (2) administrative roles of MTMC and the Military Sealift Command (MSC) in shipping agreements.

GAO found that: (1) MTMC properly considered only incremental port handling costs and not the full cost of using a government-owned military terminal in determining the lowest-cost routing for moving cargo, since there was no legal requirement to the contrary; and (2) since 1981, MTMC has been responsible for administering sealift cargo booking and contract administration, while MSC continues as sealift operator and procuring agent.

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