Defense Transportation: Ineffective Oversight Contributes to Freight Losses
NSIAD-92-96
Published: Jun 18, 1992. Publicly Released: Jun 22, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) efforts to prevent losses of government property in transit, focusing on: (1) the extent that defense property is lost in transit; (2) the DOD astray freight program, designed to recover misdirected government property; and (3) factors contributing to losses of DOD property in transit.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Military Traffic Management Command | The Commander, MTMC, should determine whether DOD is adequately protected when shipping items that significantly exceed carriers' liability and develop criteria for determining when transportation officials should use additional coverage. |
Closed – Implemented
Under the DOD Guaranteed Traffic Program, shippers are now given the option to purchase increased liability coverage. For non-guaranteed traffic, DOD expects to have an option plan in place by the first quarter of fiscal year 1996.
|
| Military Traffic Management Command | The Commander, MTMC, should amend the Freight Traffic Rules and provide similar measures in publications governing all motor traffic and other transportation modes, such as air, to eliminate maximum released valuation. |
Closed – Implemented
Following a DOD study, it was decided to increase liability limits and give shippers the option to obtain additional coverage. (See previous recommendation action taken.)
|
| Military Traffic Management Command | The Commander, MTMC, should ensure that the Transportation Discrepancy Report data-base computer program functions as intended and that installations report transportation discrepancies to enable MTMC program managers to analyze trends and weaknesses in the transportation system and make recommendations for improvements to DOD. |
Closed – Implemented
MTMC developed a TDR screen that allows analysis of trends and weaknesses in the transportation system. Access is available to all installations on-line to the Continental United States Freight Management System.
|
| Military Traffic Management Command | The Commander, MTMC, should inform the Director, DFAS, that MTMC plans to disqualify or suspend a carrier so that DFAS can accelerate collection procedures. |
Closed – Implemented
MTMC implemented procedures to accelerate collection procedures when necessary.
|
| Department of Defense | To improve the transportation discrepancy report system and the astray freight program, the Secretary of Defense should direct top management at DOD installations to place more emphasis on participating in the astray freight program and the transportation discrepancy reporting system and ensuring that proper shipping and receiving procedures are practiced, including accurate preparation and transmission of the government bill of lading. |
Closed – Implemented
MTMC conducted activities to increase awareness and importance of reporting astray frieght, which included conducting 12 briefings in FY 1992 to various groups responsible for managing the program. MTMC CDR has stressed importance in speeches and newsletters. As a result, over $14 million has been recovered in FY 1992 and $7.7 million in the first half of FY 1993.
|
| Department of Defense | To improve the transportation discrepancy report system and the astray freight program, the Secretary of Defense should direct the Director, Defense Logistics Agency, to determine the cost-effectiveness of labelling each box in a pallet or, at a minimum, labelling the boxes, such as the boxes on the top tier, that may become vulnerable to loss. |
Closed – Not Implemented
After conducting a feasibility test, DLA said that implementing this recommendations would be cost prohibitive.
|
| Department of Defense | To improve the transportation discrepancy report system and the astray freight program, the Secretary of Defense should direct the service secretaries to automatically include the toll-free number for reporting astray freight on the government bills of lading. |
Closed – Not Implemented
DOD said that this recommendation would be cumbersome and impractical to implement.
|
| Military Traffic Management Command | Although the recent DOD initiatives should greatly improve the astray freight program, the Commander, MTMC, should institute a training program that includes all the elements of identifying, recovering, and monitoring government freight. Training should include: (1) a clarification of the astray freight definition; (2) methods for targeting carriers for inspection of terminals and warehouses and for tracing and recovering freight; (3) historical data on freight recovered through the program; and (4) fraudulent practices and potential abuses in the transportation system. |
Closed – Implemented
Training was given to 100 attendees at workshop which will be given every 6 months, plus other workshops, which included topics included in the recommendation.
|
| Military Traffic Management Command | Although the recent DOD initiatives should greatly improve the astray freight program, the Commander, MTMC, should systematically assign astray freight committees and members to carriers on the basis of data such as freight volume and the number of carrier terminals and warehouses in the area and on transportation discrepancy reports. |
Closed – Implemented
Assignments were completed during first quarter 1993, plus assignment of additional personnel and workload redistribution resulted in adding new committees.
|
| Military Traffic Management Command | Although the recent DOD initiatives should greatly improve the astray freight program, the Commander, MTMC, should regularly update the astray freight manual to include specific policy, procedures, and guidance on identifying, recovering, and reporting astray government property. |
Closed – Implemented
MTMC updated manual and published it in May 1993 and plans continuous updates as necessary.
|
| Military Traffic Management Command | Although the recent DOD initiatives should greatly improve the astray freight program, the Commander, MTMC, should direct the Staff Judge Advocate and the Joint Military Astray Freight Committee program manager to codevelop procedures and regulations on the identification and recovery of DOD freight from commercial warehouses. |
Closed – Implemented
Procedures and regulations were completed and incorporated in the astray freight manual.
|
| Military Traffic Management Command | Although the recent DOD initiatives should greatly improve the astray freight program, the Commander, MTMC, should require that all commercial carriers under contractual obligation to DOD inform the transportation official at the closest military installation when they have astray freight. |
Closed – Implemented
In July 8, 1992, in the Federal Register, MTMC requested carriers to participate in program, plus MTMC mentioned same at carrier conventions.
|
| Military Traffic Management Command | To provide better protection against loss and damage, the Commander, MTMC, should ensure that carriers are assessed on all performance elements in either the Defense Traffic Management Regulation or the guaranteed traffic agreement, whichever is applicable: (1) that all available information, such as loss and damage claims data and transportation discrepancy reports, is used in making the assessment; and (2) that local transportation officials receive feedback on the extent that carriers perform satisfactorily. |
Closed – Implemented
MTMC is taking actions to improve carrier performance, but actions in process are not fully responsive.
|
| Military Traffic Management Command | To provide better protection against loss and damage, the Commander, MTMC, should require the carrier performance program manager to: (1) evaluate all modes of freight traffic, including guaranteed traffic; (2) develop standard performance criteria, particularly on-time delivery requirements, and loss and damage limits, that are applicable to all freight traffic and are in the best interest of the government; (3) periodically verify that carriers certify correct delivery dates; and (4) amend the Defense Traffic Management Regulation to reflect the requirements in this recommendation. |
Closed – Implemented
MTMC consolidated many freight loss and damage responsibilities under a single directorate but did not take all the specific recommended actions.
|
| Military Traffic Management Command | To provide better protection against loss and damage, the Commander, MTMC, should revise the proposed Carrier Qualification Program regulation to include a requirement that a carrier qualified under the carrier qualification program be recertified if its participation level changes, for example, if the carrier increases the number of routes or regions covered. |
Closed – Not Implemented
MTMC believes that carriers are required to recertify. GAO disagrees with this interpretation and believes that the requirement should be clearly stated in the Carrier Qualification Regulation.
|
| Department of Defense | The Secretary of Defense should direct the Commander, MTMC, and the Director, DFAS, to regularly exchange information to identify trends and weaknesses in transporting DOD freight. |
Closed – Implemented
Capability to exchange information electronically is operational at 49 installations and projected for full operation by September 1995.
|
| Department of Defense | The Secretary of Defense and the DOD Inspector General should emphasize the importance of identifying weaknesses in transporting DOD property and taking corrective action. |
Closed – Implemented
Three audits of DOD freight shipments are scheduled for FY 1992 and FY 1993.
|
| Office of the Inspector General of the Army | The Secretary of Defense and the DOD Inspector General should emphasize the importance of identifying weaknesses in transporting DOD property and taking corrective action. |
Closed – Implemented
Three audits of DOD freight shipments are scheduled for FY 1992 and FY 1993.
|
| Department of Defense | The Secretary of Defense should include those transportation deficiencies in the Federal Managers' Financial Integrity Act report. |
Closed – Implemented
FY 1992 DOD annual statement of assurance identifies DOD transportation deficiencies.
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Topics
Accounting proceduresDefense procurementDelivery termsFreight damage claimsFreight transportationFreight transportation ratesInternal controlsLogisticsMilitary inventoriesProperty losses