WASHINGTON, March 22 (UPI) -- U.S. Transportation Command is close to selecting a private sector cargo management company to manage DOD freight movements in the United States.
TRANSCOM Commander Gen. Norton Schwartz told the House Armed Services Committee Wednesday he expects turning over management of cargo loads to a private company will yield 15 percent savings over the life of a seven-year contract. That translates to about $60 million a year. The Defense Department spends about $900 million a year in freight transportation costs, roughly $560 million of which would fall under a transportation manager.
Arms and ammunition will not be managed by the TSM, among other categories, according to DOD documents.
The Defense Department maintains over 600 shipping locations in the continental United States. It expects to have 98 percent on time pick ups and deliveries with the new system, in-transit visibility of assets, and 98 percent loss- and damage-free shipments.
The Defense Department announced its desire to hire a third-party to manage its shipments in 2005.
"Today, DoD shippers ... initiate freight movements using commercial freight transportation providers to myriad U.S. destinations, creating thousands of origin-destination pairs. Multiple information systems are employed to execute and manage shipment activity. There is no centralized planning, coordination, or control. Individual DoD shippers act unilaterally by independently selecting transportation mode, level of service, and transportation provider. There is limited collaborative visibility or coordination of movement requirements and therefore there are limited opportunities to leverage the entire DoD workload to create the volume needed to drive increased velocity and reduced cost," a Pentagon announcement said in outlining the problem.
Original plans called for the award of first contracts in the second quarter of 2007, which ends at the end of March.
