Weaknesses in Negotiating Rates and Services for Commercial Containerized Sealift

Containerized service, or containerization, is a relatively recent innovation in shipping which allows the loading of cargo into intermodal containers for shipment from source to user over several modes of transportation without intermediate rehandling. Containerization is the principal means by which the Department of Defense (DOD) supplies its forces overseas. GAO reviewed the Military Sealift Command's (MSC) management of commercial containerized sealift service and the process of negotiating rates for such service to determine: (1) how well MSC was obtaining rates and services for meeting DOD shippers' container requirements; (2) whether the present system of procurement was effective in getting the lowest and most advantageous rates; and (3) if MSC adequately considered the needs of DOD shippers and the ability of the ocean carriers to offer such rates.