[Federal Register Volume 59, Number 167 (Tuesday, August 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21321]
[[Page Unknown]]
[Federal Register: August 30, 1994]
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DEPARTMENT OF DEFENSE
International Personal Property Program--Proposed Test
AGENCY: Military Traffic Management Command, DOD.
ACTION: Notice of Proposed Test in the International Personal Property
Program.
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SUMMARY: The purpose of this notice is to provide advance information
concerning a test of a new code of service to move international
household goods (HHG) shipments under the MTMC international through
Government Bill of Lading Program (ITGBL). MTMC is proposing to test a
new code of service, (Code 3), for ITGBL HHG shipments moving between
CONUS and Korea, Japan, and Okinawa, effective with the international
summer (IS95) cycle, 1 April 1995. Carrier single factor rate (SFR)
submissions for Code 3 service will include all charges and the
performance services currently in the Code 4 rate except ocean freight
charges. The Military Sealift Command (MSC) over-ocean routing rates
will be used for the ocean segment. The terms, conditions, and rules,
contained in the International Personal Property Rate Solicitation will
apply. Certain provisions will be added to the MTMC ITGBL rate
solicitation to authorize use of the MSC ocean rates by approved
freight forwarders and will provide conditions for forwarder
participation. The IS95 solicitation is scheduled to be distributed to
industry in mid October, to be effective 1 April 1995.
DATES: Comments must be received September 29, 1994.
ADDRESSES:
1. ITGBL carrier/industry comments should be mailed to
Headquarters, Military Traffic Management Command, ATTN: Ms. Shelly
Johnson, MTOP-T-NP, Room 621, 5611 Columbia Pike, Falls Church, VA
22041-5050.
2. Ocean carrier comments should be mailed to Commanding Officer,
Military Sealift Command, Central Technical Activity Command, ATTN: Mr.
Doug Anderson, N-10, Washington, DC 20398-5100, with a courtesy copy to
HQMTMC.
FOR FURTHER INFORMATION CONTACT:
1. Ms. Shelly Johnson, POC for the International Personal Property
Rate Solicitation, (703) 756-2383.
2. Mr. Doug Anderson, MSC, POC for the MSC Rate Guide, (202) 433-
0415.
SUPPLEMENTARY INFORMATION: MTMC proposes testing a new code of service
(Code 3) for international containerized HHG shipments moving between
CONUS and Korea, Japan, and Okinawa. Department of Defense-approved
ITGBL carriers having Code 4 approval to transport HHG shipments to/
from Korea, Japan, and Okinawa, will be automatically, unless otherwise
requested, approved to participate in the test. ITGBL carrier
participation and/or rate submission, is optional. The transportation
SFR for Code 3 shipments will include all services in Item 432 of the
International Personal Property Rate Solicitation except over-ocean
transportation charges. MSC rates published in the MSC Container
Agreement and Rate Guide will be used for the ocean segment. Code 3
service will be in addition to the other established codes of service,
such as Codes 4 and 5. Movement of these shipments will be predicted on
the policy, administrative requirements, terms, conditions, and rules,
contained in the International Personal Property Rate Solicitation, the
MSC Container Agreement and Rate Guide, and are subject to the
following requirements.
a. Operational Procedures
Code 3 service is defined as the movement of HHG in Type II MTMC-
approved containers whereby a carrier provides origin services,
linehaul service from origin residence to a commercial ocean terminal,
ocean transportation (using MSC negotiated rates to a commercial port
of discharge), linehaul to the destination residence, and destination
services.
The information outlines below applies to the movement of Code 3
shipments.
1. Authority to Use MSC Rates. The MSC Worldwide Container
Agreement contains authority for MTMC approved ITGBL carriers to use
MSC negotiated ocean rates. Section C-5 of the Worldwide Agreement
defines the Government as the U.S. Government, its agents, and
contractors. The ocean carrier is obligated in accordance with Sections
C-4 and C-6 of the MSC Worldwide Container Agreement to transport cargo
tendered by the Government. The ocean carrier will perform services in
accordance with MSC contracts upon proper ordering by an authorized
ITBBL carrier.
2. Ordering Activity Designation. MTMC, as the Administrative
Contracting Officer for MSC will designate ITGBL carriers with accepted
Code 3 rates on file, as ordering activities of the Government. As an
ordering activity of the Government, the ITGBL carrier will have
authority to book containers on behalf of the Government within the
limits of delegation and subject to Government oversight. Ordering
activity authority will allow the ITGBL carrier to utilize MSC
negotiated rates. The ITGBL carrier will be responsible for exercising
its administrative authority in accordance with the delegation
authority granted by MTMC, and with the terms and conditions of the MSC
container agreement with oversight by MTMC. ITGBL carriers designated
as ordering activities of the Government will sign an agreement
acknowledging the terms, conditions, and responsibilities, associated
with the delegated authority. A listing reflecting those ITGBL carriers
designated as ordering activities of the Government will be provided to
the MSC ocean carriers prior to the effective date of the cycle.
3. Withdrawal of Ordering Activity Authority. MTMC may revoke the
ordering activity authority of any ITGBL carrier who fails to comply
with the terms, conditions, and responsibility associated with use of
the MSC negotiated rates. This will preclude the ITGBL carrier from
further participation in Code 3 traffic for the remainder of the
solicitation period and cycle. Repetitive violations of ordering
activity authority may result in removal of the ITGBL carrier from
further Code 3 participation.
4. Ocean Carrier Cargo Allocations. In accordance with the terms
and conditions of the MSC Container Agreement, the low cost ocean
carrier will be offered 75 percent of the available cargo on a given
route. The remaining 25 percent of the cargo will be offered to other
participating ocean carriers. All Code 3 HHG shipments, under this test
will be offered initially to the low cost ocean carrier and included in
the 75 percent cargo allocations.
5. Ocean Container Bookings. MTMC will provide port information and
administrative institutions to ITGBL carriers and adjust such
instructions, as required, to provide for compliance with HHG
distribution requirements. ITGBL carriers will be required to adhere to
these instructions. ITGBL carriers will offer all Code 3 shipments to
the ocean carrier establishing the lowest MSC rate for the applicable
route unless instructed to do otherwise by MTMC. If the shipments are
declined by low cost ocean carrier, a nonavailability statement will be
issued by the ocean carrier and required to accompany the ITGBL
carriers billing to the appropriate Defense Finance and Accounting
Office.
6. Container Utilization. ITGBL carriers participating in Code 3
traffic will be required to optimize ocean container utilization.
Imposition of utilization factors are necessary to incentivize optimal
loading of containers since MSC rates are based on rates per
measurement ton utilizing 100 percent of the inside cubic capacity of
the container regardless of the actual of HHGs loaded in the container.
(See paragraph a. 10.(b)).
7. Coloading. To permit carriers ability to continue traditionally
accepted commercial coloading practices, carriers may coload Code 3
shipments. Code 3 shipments may only be coloaded in ocean containers
with Code 3 shipments. The ITGBL carrier's Ordering Activity will be
revoked if it is found that Code 3 and Non-Code 3 shipments are
coloaded.
8. Payment of Ocean Charges. The ITGBL carrier who orders services
from the ocean carrier on behalf of the Government is responsible for
payment of MSC ocean rates to the ocean carrier. Ocean freight charges
shall be earned by the MSC ocean carrier upon delivery of the shipment
to the destination named in the shipping order in accordance with MSC's
agreements and rate guides. Payment by the ITGBL carrier shall be made
within 30 days after receipt of a proper invoice from the MSC ocean
carrier of evidence of delivery whichever occurs later. ITGBL carriers
will be reimbursed for over-ocean movement costs for Code 3 shipments
tendered to the low cost ocean carrier or when a nonavailability
statement is provided by the low cost ocean carrier indicating the
shipment was refused.
9. Failure to Pay Ocean Carrier. In accordance with the terms and
conditions of the MSC Container Agreement, the Government is
responsible for payment of ocean charges if the ITGBL carrier fails to
pay the MSC ocean carrier. MSC will maintain a reserve fund for use in
paying the ocean carrier. MTMC will initiate set-off action against
ITGBL carriers for ocean charges, applicable interest, and any other
costs incurred for nonpayment of ocean charges. Designation of ordering
activity authority will be revoked, and the ITGBL carrier will be
precluded from further participation in Code 3 traffic.
10. Reimbursement of Ocean Charges.--(a) The ITGBL carrier will be
reimbursed for its pro rata share of the average ocean charges incurred
by the use of MSC's contract carriers based on the net hundredweight of
the HHG shipment. The ITGBL carrier will be paid that portion of the
average ocean charges in accordance with the procedures set forth in
paragraph a.10.(b).
(b) The ITGBL carrier will be paid its pro rata share of the
average ocean charges incurred under Code 3 shipments based on
multiplying the net hundredweight of the HHG shipment shipped with the
ITGBL carrier against an MSC determined ocean rate factor. The MSC
ocean rate factor is based on dividing MSC's total ocean charges for
the movement of a standard 40' by 8' by 8'6'' dry ocean container (40'
standard container) of general cargo over a specific traffic channel by
the average amount of net hundredweight of HHG 'cargo that can be
loaded into that size container. The average net hundredweight of HHG
cargo that can be loaded into a 40' standard container is calculated to
be 130.41. That 130.41 net hundredweight is calculated by using a load
factor of 10 average size Type II containers (152A) in a 40 standard
container. At 189 cubic feet each, these 10 average Type II containers
will hold 13,041 reduced to a hundredweight factor, divided into the
MSC calculated per 40' standard container rate for a given movement
shall be the applicable ocean freight reimbursement factor. This MSC
ocean rate factor is then multiplied against the net hundredweight of
the ITGBL carrier's shipment over that channel and the ITGBL carrier is
paid the resulting amount. The predetermined ocean freight
reimbursement factor for each Code 3 channel shall be computed by MSC
and provided to the applicable paying office.
(c) The ITGBL carrier will bill the appropriate finance and
accounting office responsible for payment of transportation charges for
Code 3 shipments. Over-ocean charges will be identified as a separate
line item charge on the public Voucher for Transportation Charges, SF-
1113. An MSC Over-Ocean Charge Item will be included in Chapter V of
the International Personal Property Rate Solicitation. This item number
must be reflected on the SF-1113 with the over-ocean charge. All
billings must be supported by appropriate documents identified in the
Tender of Service, Figure A-8, of the Personal Property Traffic
Management Regulation (PTMR), DOD 4500.34R, with the following
exceptions; the shipping order must be submitted in lieu of billing
document number 8, commercial ocean bill of lading, and a copy of the
nonavailability statement must be submitted, in order to justify
payment, for those instances where the low MSC ocean carrier refused
the shipment.
11. Reporting Requirements. For the period of the rate cycle (1 Apr
95-30 Sept 95), ITGBL carriers participating in the movement of Code 3
shipments must provide monthly summary reports to MTMC ADCSOPS-Quality.
This information will be used to monitor payment activity to ocean
carriers and test results. Code 3 shipments must appear on a monthly
summary report no later than 60 days following the required delivery
date. The report will list the personal property Government Bill of
Lading numbers (PPGBLs), coloading and container utilization
information. Supporting documentation that must be submitted with the
summary report includes shipping orders for the referenced PPGBLs, a
certification indicating the ocean charges were paid, and a
nonavailability settlement, if other than the low cost ocean carrier
was used. Specific information and format requirements for the summary
report will be provided with the IS95 solicitation.
b. Rate Submission Requirements
The rate filing instructions contained in Chapter 19 of the
International Personal Property Rate Solicitation will apply for Code 3
rate submissions. The following information for Code 3 rate submissions
applies.
Code 3 rates will be designated as Class 2. All procedures in
Chapter 19 governing Class 2 initial filing (I/F), and me-too (M/T)
rate submissions will apply for Code 3. Code 3 rates will be submitted
on magnetic tapes, prepared in accordance with the established
instructions and formats prescribed in Appendix 19A of Chapter 19.
Submissions must be in accordance with the filing schedule provided
with the applicable rate solicitation letter. The position number
indicated for Code 3 on the ground specification formats contained in
Appendix 19A will apply.
The administrative high rate used in the I/F for Code 3 will be
$250. The maximum M/T filing criteria for Code 3 will be the low rate
plus $50. Code 3 rates which exceed the maximum filing criteria will be
removed. Code 3 rates will be listed in the accepted rate
certifications and error listings. Mistake in rate filing procedures
for Class 2 rates as specified in Item 1908 of Chapter 19 apply.
Records rejected during the I/F or M/T due to an error will have a
rejection code indicated. The error description codes contained in Item
1916 will apply. Code 3 rates will be listed on the accepted rate
certifications and error listing. Carriers are responsible for
reviewing and certifying the accuracy and completeness of rates listed
on their transaction printout.
Accepted Code 3 rates will remain in effect for the first 2 months
of the rate cycle. Carriers may cancel accepted Code 3 rates in
accordance with the designated cancellation filing dates and effective
dates announced in the rate filing schedule. Carriers canceling rates
will receive a copy of the accepted and rejected rate cancellation
listing. The error codes for rejected cancellations are outlined in
Item 1919.
c. Traffic Distribution
Code 3 shipments will be distributed in accordance with procedures
set forth for Class 2 rate channels as specified in Chapter 17 of the
International Personal Property Rate Solicitation. The designated
percentage of traffic offered to the low rate setter on any given
channel will be based on the percentages reflected in the HHG tonnage
estimates distributed with the applicable solicitation.
d. Transit Times
The Code 4 transit times published in the PPTMR, DOD 4500.34R, will
apply for Code 3 shipments tendered during the test period.
e. Liability
The ITGBL carrier liability for Code 3 shipments will be $1.80 per
pound per article. The terms, conditions, and rules, contained in Item
410 of the solicitation will apply. None of the memoranda of agreement
in effect with the carrier industry will be abrogated by the use of MSC
rates. The Military Claims Services will assert demands against
forwarders for loss and/or damage based on claims filed against the
Government by the service member. The ITGBL carrier will act as the
Government's claims agent against the ocean carrier in those cases
where the forwarder can prove the ocean carrier was at fault. In the
absence of a resolution of a claim, the ITGBL carrier and the MSC ocean
carrier shall have the right of recourse to the MSC procurement
contracting officer (CO) under the contracts Dispute Clause. In the
event of such a disputed claim by the ITGBL carrier against the ocean
carrier, the ITGBL carrier shall provide all necessary documentation to
support the Government's claim against the ocean carrier. The
procurement contracting officer will then issue a CO's final decision
determining the extent to which a valid claim has been established. If
the CO's final decision determines the Government has an affirmative
claim against the ocean carrier, MSC will assign its rights to assert
an action against the MSC ocean carrier for loss and/or damage to Code
3 shipments, under the Shipping and Container Agreements, to the ITGBL
carrier subject to the right of the Attorney General to supervise and
control litigation directly involving the U.S.
f. Total Quality Assurance Plan (TQAP)
The standards of service and procedures contained in TQAP, or
latest changes thereto apply to Code 3 shipments.
Kenneth L. Denton,
Army Federal Register Liaison Officer.
[FR Doc. 94-21321 Filed 8-29-94; 8:45 am]
BILLING CODE 3710-08-M
