Automated tariff may impact MTMC business operations - Military Traffic Management Command - Brief Article - Statistical Data Included

Translog: Journal of Military Transportation Management, Jan-Feb, 2001

By MTMC Command Affairs

A new automated tariff being developed by a household goods trade association may have a big impact on the way the Military Traffic Management Command conducts business.

Tariff 2001 is under development by the Household Goods Carriers' Bureau Committee of the American Moving & Storage Association, Alexandria, Va., said Joe Harrison, President.

"We are going to change something that hasn't changed in 60 years, and it is a monumental task," said Harrison, at a MTMC Industry Day briefing Nov. 29.

The trade association represents 3,500 household goods carriers. Its Household Goods Carriers' Bureau Committee operates pursuant to a government-approved ratemaking agreement that allows it to publish and maintain rate tariffs on behalf of the moving and storage industry.

The tariff will be implemented by fall 2001, said Harrison. It will replace the current Tariff 400-M, which is in a manual format.

"The current Tariff 400-M is too complex," said Harrison. "There are estimating problems, too many billing errors and auditing problems associated with the current tariff. In addition, there is customer confusion concerning the price complexity of the current system."

The new tariff will completely eliminate the paper quotient of the tariff, said Harrison.

When implemented, the new tariff may serve as a big benefit for MTMC, said Maj. Gen. Kenneth L. Privratsky, Commander.

The automated tariff may have a direct usage for MTMC in the future, said Privratsky.

"I hope we in MTMC have sense enough that if it is good enough for commercial shippers, it should be good enough for us," said Privratsky. "We don't have to create a separate system."

Currently, the U.S. Transportation Command is directing an effort known as Management Reform Memorandum #15. It directs its transportation commands to use automated processes at work in the private enterprise sector--and not develop separate, military-unique software.

"We're on the verge of making significant progress," said Privratsky.

Tariff 2001 has numerous advantages, said Harrison. New features include:

* Totally electronic.

* Quick and easy shipment rating.

* Easy for customer and mover to understand.

* Promotes accurate estimating and billing.

* Cost-base pricing.

"Tariff 2001 will be a totally electronic, computer-based tariff," said Harrison. "It can reside on a laptop computer, personal computer or network. It will also be available on the Internet at some time in the future."

With a minimum of entries, he said, an estimate or actual billing can be accomplished quickly with only a few computer-generated calculations.

A user requires only the first three digits of the postal ZIP code for the origin and destination of the shipment, as well as shipment weight, to instantly determine the applicable line-haul charges.

Rates, said Harrison, are based on "industry-average carrier costs." The new line-haul rates reflect geographic cost factors, as well as the incorporation of certain accessorial revenue for services that currently are billed separately. As an example, the line-haul rates will include the cost associated with providing stair carries, long carries and use of elevators.

Of interest, Harrison said the rates reflect the fact, on average, that movers pack one box for every 100 pounds of a shipment.

"We found this after a review of nearly one million shipments," said Harrison.

"We are close to finalization," he said. "While Tariff 2001 requires the moving and storage industry to significantly change its approach to pricing, it will ultimately make life much easier for everyone."