MTMC adopts big cut in cargo handling rates
Beginning Oct. 1, MTMC's many customers will see their freight rates drop.
Cuts are taking place in cargo operations, the shipment of privately owned vehicles and liner over ocean transportation.
In cargo operations, the rates are coming down an average of 40 percent for fiscal year 2002. The rates were cut 27 percent in fiscal year 2001.
"Department of Defense customers will benefit from this rate reduction if they ship cargo through any of MTMC's 24 ports," said Virginia King, Chief, Program & Budget, Resource Management.
"We are talking about port costs for over ocean shipments."
MTMC cargo operations rates have been a source of criticism in past years from military shippers within the Department of Defense.
The real winner is the taxpayer: The cost of military transportation is reduced.
The cargo operation rates went up 99 percent in fiscal year 2000.
Examples of cargo operations vary.
One example is the shipping rate the 101st Airborne Division (Air Assault) pays to ship a task force from Jacksonville, Fla., to Port Hueneme, Calif, for training at the National Training Center. Another example is the costs of loading ammunition on a prepositioned ship at the 597th Transportation Group, Southport, N.C.
"We are a customer service organization - anytime we can do anything for our customers we are elated over it," said King.
The biggest reason the rates came down, said King, is MTMC has achieved more efficient operations. For instance, over $57 million in savings was achieved in fiscal year 2000, ending Sept. 30.
"We knew we would get some reduction," said Steve Andrews, Team Leader, Working Capital Fund.
"This is a lot more than I expected - It is a reflection in costs savings achieved in MTMC in the past year."
Savings were achieved in such areas as labor, travel and contractor costs for new systems development.
Other reductions include a 7 percent reduction in the cost of shipping cars in the Global Privately Owned Vehicle Contract and a 1-percent reduction in the cost of liner ocean transportation.
"These reductions are primarily related to MTMC's over all reduction in operating costs," said Andrews.
What does the future hold?
"Rates for fiscal year 2003 should be stable - or go down more," said Andrews.
The reduced shipping rates will pay big dividends for MTMC's shippers.
The cut in cargo operations means the Transportation & Troop Support Directorate, of the Army's Deputy Chief of Staff for Logistics, will be able to ship greater volumes of cargo.
"They are very important to us," said Nelson Chandler, Chief of Transportation Policy.
"The rate cut is particularly important for the next two budget years," said Chandler. "We are underfunded by $106 million in fiscal year 2001.
"This is critical to us."
Chandler said his organization faces similar budget shortfalls in fiscal year 2002 when the 40 percent cut in shipping rates go into effect.
The Transportation & Troop Support Directorate is involved in a wide variety of shipments of freight - through MTMC ports - on a worldwide basis.
The directorate ships ammunition, equipment and supplies of all kinds. Specific cargoes vary from War Reserve ammunition to Army-Air Force Exchange Service goods and supplies. (FROM MILITARY TRAFFIC MANAGEMENT COMMAND PUBLIC AFFAIRS).
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