Defense Transportation:

Commercial Practices Offer Improvement Opportunities

NSIAD-94-26: Published: Nov 26, 1993. Publicly Released: Nov 26, 1993.

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GAO provided information on the Department of Defense's (DOD) efforts to improve its domestic motor freight transportation management practices, focusing on: (1) commercial-sector trends to reduce costs and increase efficiencies in transportation; (2) DOD efforts to improve transportation management; and (3) commercial practices that could result in more efficient and effective DOD transportation practices.

GAO found that: (1) commercial shippers recognize that top management commitment and support is needed to implement transportation management improvement efforts; (2) commercial shippers have initiated actions to reduce costs and increase efficiency including integrating transportation functions within the logistics chain, reducing the number of carriers, focusing on high-performance carriers to promote stability and enhance leverage, utilizing information technology in their decisionmaking, and contracting for certain transportation functions to take advantage of lower costs and flexibility during market swings; (3) DOD ability to effectively manage its transportation operations is limited because of the large number of carriers it uses to move its freight, and redundancy and lack of standardization among its automated systems; (4) funding for the U.S. Transportation Command's oversight of transportation systems development has not been finalized; and (5) although DOD has made progress in reducing the number of carriers it uses and selecting high-quality carriers, it needs to implement strategies similar to those used by the private sector including comparing its transportation processes and costs with those of corporate shippers, promoting efficiency and reducing redundancies by standardizing its automated systems, streamlining transportation management and reducing costs, and enhancing information technology carrier management data collection.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOD is working with outside groups to improve global logistics. Although most of the groups it has talked with are carrier-related, DOD has at least visited several commercial companies and government agencies to discuss benchmarking and other practices.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to create a group composed of corporate shippers and other transportation experts to assist the Under Secretary of Defense for Acquisition and the Commanders of the U.S. Transportation Command and Military Traffic Management Command in evaluating opportunities to benchmark and reengineer DOD transportation practices and coordinate efforts with other DOD supply initiatives to foster global logistics solutions.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD has explored the possibility of using third-parties for data collection but found that the size of the task was too great to use them effectively. Instead, it is trying to collect the data through its own data system--the CONUS Freight Management System. Though this system is not operative at all shipping installations, it is being used effectively at 95 transportation offices.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to improve the collection of carrier performance data to more effectively monitor and evaluate carriers by requiring major carriers to provide the data needed to analyze performance and verify the data, utilizing third-party sources that specialize in establishing carrier performance databases and providing oversight for this function, or ensuring that a DOD standard transportation system incorporates the collection of all relevant carrier performance data.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: MTMC has acquired a waiver for the General Services Administration to allow the use of a single bill of lading. No data are available on how often it is used.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to consider preparing a single government bill of lading to cover similar and repetitive (nonhazardous) shipments during a specified period and, in those instances for which it is advantageous, seek a waiver from the General Services Administration to cover multiple daily shipments under one bill of lading only if paperwork will be reduced, a complete audit trail will be maintained, and follow-on shipments will be nearly identical.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: MTMC is conducting on-site inspections on an as-necessary basis. Modifying the Carrier Qualification Program to do so was not necessary.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to modify the Carrier Qualification Program regulation to give DOD the right to permit on-site inspections before qualifying carriers and conduct general follow-up inspections after the carrier has been qualified to ensure compliance with DOD standards (the current regulations allows such inspections for safety and security purposes).

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: Under the Military Traffic Management Command Guaranteed Traffic Program, the Command is including a 95-percent on-time performance criteria in its guaranteed traffic contracts. Other best practice initiatives, though not all satisfactorily completed, are ongoing and should provide for better carrier performance.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to strengthen carrier performance standards, such as requiring 95 percent on-time delivery, rather than the 85 percent currently required by the Defense Traffic Management Regulation.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: The Carrier Qualification Program will continue to decrease the DOD carrier base through stringent enforcement of financial and bond requirements and examination of management structure, equipment availability, operating authority, and insurance carried. Aggressive qualification actions have decreased the size of the carrier base to 359 DOD qualified carriers.

    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense for Acquisition to limit the number of carriers it uses to those that provide high-quality service to promote stability, enhance leverage, and lessen its administrative burden. This could be accomplished by concentrating larger volumes of freight with fewer carriers through the guaranteed traffic program. Fewer carriers would free up resources for DOD to conduct on-site inspections before qualification, enable enforcement of its carrier performance standards, and eliminate carriers that do not meet performance standards.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: The Joint Transportation Corporate Information Management Center is funded for fiscal year 1994 from the Corporate Information Management central fund, and it will be funded from operations and maintenance money in fiscal year 1995.

    Recommendation: The Secretary of Defense should direct the DOD Comptroller to fund the Joint Transportation Corporate Information Management Center to control development of current and future automated transportation systems. The Center will allow DOD to identify its data requirements, set priorities for systems development to achieve a standard DOD automated transportation system that is integrated with the DOD supply system, giving DOD the visibility needed to track shipments, and strengthen controls on the development of new transportation systems.

    Agency Affected: Department of Defense

 

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