DoD Testing Three Household Goods Shipment Concepts
By Rudi Williams
American Forces Press Service
FALLS CHURCH, Va., Oct. 30, 1998 After years of struggling to fix a "broken, unpatchable," decades-old household goods shipment system, DoD is testing three new concepts aimed at improving quality of life and incorporating corporate business practice.
"Over the last 35 years, we've attempted to fix what we thought needed fixing," said Phyllis Broz, program manager of the Military Traffic Management Command's pilot program. "What we ended up with is a broken system that's impossible to patch. Now we're wiping the slate clean and starting over with three new concepts."
The largest effort is the year-long, $55 million Military Traffic Management Command test, scheduled to start in January. The command's test will involve moving about half of the outbound household goods shipments originating from North Carolina, South Carolina and Florida -- about 18,500 households, Broz said.
The Army and Navy have been testing similar concepts on smaller scales for about a year. After the tests are completed, the U.S. Transportation Command and General Accounting Office will evaluate the results and make recommendations to DoD on which is the best, she said.
"The new system may incorporate the best parts of each of the three tests," she noted. "DoD is the largest shipper in the world. Nothing comes close to us, so we believe we deserve the same high-quality service as the movers provide their corporate customers." She said DoD moves about 650,000 service members, civilian employees and family members per year -- the next largest mover, the General Services Administration, handles only about 15,000 moves a year.
She said the current system has extremely high loss and damage rates. A 1997 Military Traffic Management Command customer satisfaction survey found that six out of 10 households suffer loss and damage. Broz calls that "particularly disturbing."
"That's 2.6 times the actual DoD claims rate of 23 percent and 4.3 times the 14 percent claims rate for industry's best corporate customers," she said. "That indicates DoD customers are personally absorbing the cost of their losses and damage rather than go through the paperwork and delay of the present claims process."
Pilot program participants have two options for filing damage and loss claims. They can file directly with the carrier and be reimbursed within about 60 days, if test standards are met. Broz said participants will probably choose this option in most cases.
Because this is only a test, however, participants retain the right to use current claims procedures if they prefer, she said. This means filing claims through their military legal services office for reimbursements at the depreciated value of $1.25 per pound shipped -- up to $40,000, she noted.
Customers have to buy full replacement value insurance under the current system, but not under the pilot program, Broz noted. "In the new program, they'll be paid the full replacement value at no additional cost," she said. "For instance, if a customer's five-year-old 27-inch television is destroyed, he would get a new 27-inch television. That's corporate business practice."
There's also "pairs and sets" coverage in the test concept, Broz said. "If you have two end tables and one is damaged, you don't want an end table that doesn't match," she said. "What happens in the current program is, it's cheaper for the mover to pay you that $1.25 per pound depreciated value for the damaged table. Under the new program, the carrier has to replace both tables."
The reimbursement ceiling varies in the three tests. The upper limit is $63,000 in the Military Traffic Management Command program, but $75,000 in the Army test and $72,000 in the Navy's.
Broz said customers will be paid for inconvenience if a shipment is picked up or delivered after the agreed date in the traffic management command program. "This includes money for such things as lodging and food," she said.
The contract calls for a one-on-one meeting between the contractor and the customer to discuss particulars of the move. The Military Traffic Management Command's contract doesn't include entitlements counseling as do the Army and Navy contracts.
The Army's test program includes military and civilian families and is limited to outbound household goods moves from Hunter Army Airfield, Ga. -- participation is mandatory.
"Although household goods are our primary focus, we were also after commercial-type relocation services, like home-finding for buyers and renters, home selling, property management and mortgage services," said Lisa Roberts, a traffic management specialist in the Army Transportation Policy Division at the Pentagon.
The contractor provides a variety of quality of life services, Roberts noted. "One of the most important things we're getting is point-to-point move management, which means soldiers and civilians have a single point of contact for the entire move," she said. "They're assigned a personal move coordinator who manages shipments from Hunter to the final destination. The coordinator handles claims, excess charges -- everything.
Hunter customers receive binding written estimates for moving items over their authorized weight limits. "They're told ahead of time how much it will cost to ship excess weight," Roberts said. "Under the current system, it could be a year or two after delivery before the customer gets a surprise bill in the mail." Excess weight charges also include such services as special crating for treasured possessions.
"Claims is big area," Roberts said. "We require the contractor to offer settlement within 30 days. The contractor obtains the estimate for repairs or replacement instead of the customer having to do it. That makes it easier for members to file a claim."
"We're more than a year into our program, and, so far, everyone has filed with the contractor," she noted.
Navy Cmdr. Linda Schlesinger boasts that the Navy's Service Member Arranged Move program, or SAM, incorporates the best attributes of the Military Traffic Management Command and Army programs and more.
She said SAM's goal is to offer sailors moving choices to fit their specific needs, give them more control over their move, provide a better quality move, and reduce damages and claims.
"Sailors are allowed to choose the mover they want to use from a list of participating carriers," said Schlesinger, a SAM program manager at the Naval Supply Systems Command, Mechanicsburg, Pa. "They negotiate the pickup and delivery schedule, settle claims directly with the carrier and have 100 percent loss or damage protection."
Sailors also have the option of being issued a pager for their move. "We'll give them a pager so they can make delivery or pick up arrangements with trucker instead of sitting around from 8 a.m to 5 p.m. waiting for the carrier to show up," She said.
The test is limited to shipments to and from Norfolk, Va.; Bremerton, Wash.; San Diego; Whidbey Island, Wash; and New London, Conn. "Pensacola and Jacksonville, Fla., are also participating, but only in the receive mode, which means shipments can't originate from those areas," Schlesinger noted.
She said SAM is entirely voluntary and offered only to active duty Navy people at this time.
Carriers like the Navy's program, she said, because, instead of waiting for payment from the Defense Finance and Accounting Service, they're paid almost immediately with a government credit card. She said this is the first time the government card has been used this way.
"All of the pilot programs have hired the best-valued movers instead of the lowest bidders, as we used to do," Military Traffic Management Command test manager Broz said. "They're under contract, so if they don't perform, we simply don't use them anymore.
"If they do a good job, they're going to get more business," she said. "Under the current system, traffic is distributed equally. There's no incentive for someone to do something particularly good, because he's going to get the same amount of traffic as the poor performer."