Third drop in three years … MTMC cuts its port operations rates again

Translog: Journal of Military Transportation Management, Jan-Feb, 2002

For the third year in a row, the Military Traffic Management Command is cutting its port operations handling rates.

Beginning Oct. 1, the freight rates will be cut for many MTMC customers.

Cuts are taking place in three transportation areas: Port operations, privately owned vehicles, and liner-over-ocean transportation.

In port operations, the rates are coming down an average of 38 percent for fiscal year 2003, which begins Oct. 1.

The rates were cut an average of 40 percent in fiscal year 2002. Rates were cut 27 percent in fiscal year 2001.

"There are a lot of reasons for the cut, but most noteworthy is the efficiency of our command's overall costs and operations," said Steve Andrews, Team Leader, Working Capital Fund.

"This involves port costs for over-ocean shipments handled by any of MTMC's 24 terminal units," said Andrews.

Department of Defense customers benefit through other cost cuts as well. There will be a 15-percent reduction in the cost of shipping cars in the Global Privately Owned Vehicle Contract, and an average of 8-percent reduction in the cost of liner ocean transportation.

"In all, we're returning $77 million to our customers," said Andrews.

MTMC's ocean terminal operations vary.

They include such operations as the ocean movement of equipment for peacekeeping troops going to Kosovo and Bosnia.

What does the future hold?

"It all depends on our financial results over the course of the fiscal year," said Andrews. "I hope we can have a fourth consecutive cut in fiscal year 2004."

MTMC customers will see their budgets go further with the cuts.

Shippers requiring port handling services will achieve the biggest savings. In fiscal year 2001, the Army was MTMC's biggest customer with a 40 percent share of its port operations business.

"We're thrilled," said Nelson Chandler, of the Force Projection and Distribution Directorate, of the Army's G-4 Staff, Pentagon.

"This will make our budget go a lot farther and help reduce the unfunded requirements we face each year," said Chandler, Chief of Transportation and Distribution Policy.

"Quite simply," said Chandler, "our funding will do more for us now."

"Some of the savings will enable us to better support the Army's transformation goals as we move from heavy M1 tanks to lighter, and more transportable, wheeled vehicles," he said. "Reduced transportation costs serve to lower the cost of Army modernization programs when new equipment is fielded and existing equipment is redistributed."

The Army ships ammunition, equipment and supplies of all kinds. Specific cargoes vary from War Reserve ammunition to the household goods of Army families.