DOD Household Goods:

Increased Carrier Liability for Loss and Damage Warranted

NSIAD-95-48: Published: May 8, 1995. Publicly Released: May 8, 1995.

Additional Materials:

Contact:

Mark E. Gebicke
(202) 512-5140
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed changes proposed by the Military Traffic Management Command (MTMC) regarding carrier liability for loss and damage on Department of Defense (DOD) domestic shipments.

GAO found that: (1) carrier performance has improved since DOD increased carrier liability on domestic household goods shipments; (2) although DOD claims costs declined by an estimated $18.9 million between fiscal years 1987 and 1991, only the Air Force achieved the expected level of cost recovery from carriers; (3) DOD needs to increase carrier liability on DOD international shipments so that DOD can recover the cost of damages and improve carrier performance; (4) industry officials believe that changes in carrier liability on international shipments could cause major industry disruptions unless carriers are compensated in exchange for the increased liability; and (5) MTMC does not have adequate claims information to assess individual carrier performance or the costs associated with increased carrier liability.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress has so far chosen not to implement this recommendation.

    Matter: Congress should consider shortening the statute of limitations for filing claims for loss and damage to household goods shipments to 1 year after the claim accrues.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Secretary of Defense directed MTMC to improve bond collection activities in a March 31, 1995 directive. MTMC initiated implementation of improved bond collection techniques during FY 1995.

    Recommendation: The Secretary of Defense should direct the Commander, MTMC, to review household goods program carrier bonding and insurance requirements and collection procedures to ensure that these are adequate to protect government interests under increased carrier liability.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Secretary of Defense directed all of the services to emphasize claims collection activities on March 31, 1995, with implementation expected during the remainder of FY 1995 and during FY 1996.

    Recommendation: The Secretary of Defense should direct the Secretaries of the Army and Navy to increase the emphasis placed on household goods claims recovery so as to increase these military services' recovery effectiveness to approximately the level demonstrated by the Air Force.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The Secretary of Defense directed that these reporting actions be taken on March 31, 1995.

    Recommendation: The Secretary of Defense should direct the military services to periodically report complete household goods claims recovery data to MTMC.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: The Secretary of Defense directed the Commander, MTMC to correct the inaccuracies and develop procedures on March 31, 1995. The MTMC implementation plan was developed October 1, 1995.

    Recommendation: The Secretary of Defense should direct the Commander, MTMC, to: (1) correct inaccuracies in the MTMC household goods program database regarding claims payments and recoveries; and (2) develop the procedures required to determine overall household goods program costs.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: Carriers' liability was increased October 1, 1995, as recommended.

    Recommendation: The Secretary of Defense should direct the Commander, MTMC, to increase carrier liability to the $1.25 rate on international household goods shipments after providing notice to carriers through the Federal Register. However, this rate should be accompanied by a compensatory payment for 3 years, or until sufficient claims data are available to permit carriers to file transportation claims that adequately compensate them for the increased risk they would assume.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: The charge was eliminated November 1, 1995, as recommended.

    Recommendation: The Secretary of Defense should direct the Commander, MTMC, to eliminate the separate charge now paid to carriers to compensate them for increased liability on domestic shipments.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Sep 22, 2016

Sep 21, 2016

Sep 19, 2016

Sep 12, 2016

Sep 8, 2016

Sep 7, 2016

Sep 6, 2016

Aug 25, 2016

Looking for more? Browse all our products here