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Military Traffic Management Command; Change in Acquisition Policy-Satellite Motor Surveillance Service.

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Information about this document as published in the Federal Register.

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Department of the Army, DOD.




On December 17, 2001 the Military Traffic Management Command (MTMC) published a notice in the Federal Register (66 FR 64961) concerning a proposal to incorporate any charges for Satellite Motor Surveillance Service (SNS) into the basic transportation rate for motor freight shipments. This proposal applied to the movement of arms, ammunition and explosives (AA&E) shipments. Interested parties were asked to submit comments on that proposal. As explained below, MTMC carefully and thoroughly reviewed industry comments and has determined that it is in the public interest to put this proposal into effect and has determined that this will protect the fiscal requirements of the Department of Defense (DOD).


Effective June 1, 2002.

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Mr. Frank Galluzzo, MTMC, (703) 428-2327.

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The following comments were received from industry in response to the Federal Register notice of December 17, 2001. Each comment is listed below along with a response.

(1) Industry Comment: A comment that is typical of others on this particular facet stated:

“Reference the United States District Court for the District of Columbia, Civil Case Number 93-2176NHJ, The Munitions Carriers Conference Inc. versus United States of America, et al: To wit, the Stipulation of Settlement and Dismissal subparagraph states, Defendants represent that the DOD current policy is that Satellite monitoring will be continued as a separate accessorial service for motor carriers and will neither be combined with other transportation protection services or folded into the linehaul rate. We trust the Commander MTMC will honor the commitment in this regard.”

Response: This comment refers to a 1993 case in which it was agreed that the DOD “current policy” in 1993 was to continue the satellite monitoring charge as a separate service. However, this agreement contained several other provisions, one of which stated “Nothing in this Agreement shall prevent or limit Department of Defense agencies or MTMC from making such policy, program or acquisition decisions as are required to protect the national defense, the public interest, or the fiscal and operational requirements of the Department of Defense as determined exclusively by those governmental agencies consistent with the law and policies applicable to DOD.” The DOD has determined that continuance of satellite monitoring as a separate charge is not in the public interest, nor does it meet the fiscal and operational requirements of the DOD. We note, however, that costs for this service can still be included in the basic transportation rates charged by the carrier industry.

(2) Industry Comment: Without a distinctive accessorial service charge for SNS, the panic button and visibility of AA&E shipments will not be readily available, thus placing shipments at greater risk.

Response: This change will only affect the way in which the carrier is reimbursed for SNS services provided. The carrier is still contractually obligated to provide all services as stipulated in Item 47 of the Military Freight Traffic Rules Publication (MFTRP) 1B. Additionally, SNS can still be requested by the shipping installation and annotated appropriately on the Bill of Lading. This change has no bearing on the safety or security currently provided AA&E shipments.

(3) Industry Comment: SNS application to multiple shipments on a trailer should cease with the advent of the closing of ammunition terminals and more direct shipments versus dromedary trains.

Response: Current rules do not overly restrict a carrier from consolidating AA&E shipments and moving multiple shipments in units commonly called dromedary trains. MTMC rules do restrict the method and location that consolidation may occur.

(4) Industry Comment: There are no means to convert accessorial charges into “line haul rate” charges on dromedary train shipments (distance-based versus weight-based rate applications).

Response: Carriers may wish to consider the use of the “DZ” rate qualifier in order to express a mileage-based rate for dromedary shipments. Information on the “DZ” rate qualifier, as contained in the MTMC tender instructions (MSTIP 364-C), allows the carrier to submit a dromedary rate based upon a per-hundredweight per-mile charge.

(5) Industry Comment: This will result in unfair competition between rail and Start Printed Page 17416motor as rail continues to charge for Rail Security Service as an accessorial charge.

Response: The Rail Security Service (RSS), as a separate accessorial service for rail, was cancelled on July 1, 2000, combined with tank surveillance service and redesignated as rail inspection service. Rail Inspection Service is a physical inspection and/or surveillance requirement for rail shipments. Satellite monitoring is a technology that is integral to the vehicle. There is little comparison between a rail security inspector performing physical inspections of rail cars at every stop and satellite monitoring. These are distinctive and different types of services.

(6) Industry Comment: Future Defense Transportation Tracking System (DTTS) enhancement requirements will drive up costs to motor carriers that they will be unable to recoup.

Response: Carriers should consider all costs incurred in transportation and traffic management services when preparing rate and pricing submissions to MTMC. Costs associated with providing satellite monitoring service should be included with other costs such as fuel, insurance and labor. The DOD does not imply or intend that a carrier industry provide requested services without fair and equitable reimbursement. As such carriers are free to include costs associated with satellite monitoring in the rate structure.

(7) Industry Comment: MTMC intends to keep SNS as a separate accessorial service but not for AA&E.

Response: MTMC intends to retain a satellite monitoring service for non-AA&E shipments. The service will be used on a case-by-case basis where the shipper has determined in-transit tracking is necessary. However, MTMC does not intend to separately reimburse carriers for this service. Carriers will be permitted to voluntarily offer this service and shippers may use this as a factor, along with rates and similar service factors, when selecting a best value carrier. This change will be announced at a later date.

(8) Industry Comment: The GFM system is not capable of identifying carriers who can provide SNS, except by the publishing of the SNS accessorial code in the tenders, resulting in shippers requesting AA&E service from motor carriers not able to provide SNS service. Also, there is no information on how the change will be accomplished technically.

Response: MTMC intends to continue the practice of requiring the carrier to submit the SNS accessorial code within the protective service section of the carrier's applicable tender. However, the carrier will not be able to enter a specific rate for the accessorial service as any costs associated with SNS are to be incorporated into the carrier's linehaul transportation rate. The use of the SNS code will allow existing automated systems to identify carriers eligible to provide SNS from non-SNS eligible carriers. This practice is consistent with existing MTMC procedures in accordance with Item 701 (Security and Accessorial Services for Non Guaranteed Traffic) of the MSTIP 364-C and is a standard carrier practice for tenders with exclusive use rates.

(9) Industry Comment: MTMC incorrectly assumes that all AA&E transportation requires SNS service.

Response: MTMC is fully aware that small quantity shipments of low risk AA&E do not require SNS, but require constant surveillance service. This proposal will affect only those shipments that are satellite-monitored. The requirements for small shipments are articulated in the Defense Transportation Regulation Vol II and in the MTMC Military Freight Traffic Rules Publications 1B.

(10) Industry Comment: The proposal disadvantages small carriers, as SNS equipment is not readily available to them due to costs.

Response: The proposed change has no impact on small carrier's as they would be required to acquire the same technology regardless of how the carrier is reimbursed for SNS services. In addition, DOD shipments of AA&E require satellite tracking to ensure they move safely and securely from origin to destination.

(11) Industry Comment: SNS is different from other accessorial services (tarping, chains, and dual river) because satellite equipment is not readily interchangeable. It is an accessorial service that replaced two other accessorial services (armed guards and security escorts).

Response: MTMC understands that satellite-monitoring devices are not readily transferable from one conveyance (power unit) to another. However, since, the inception of SNS the carrier industry has had almost 10 years to equip conveyances with satellite tracking devices.

(12) Industry Comment: The change is viewed as being precedent for future changes.

Response: Technology and equipment improvements associated with the motor carrier industry are continually evolving. Accordingly, MTMC will periodically review and assess the program and rules which apply to the surface movement of AA&E shipments by motor and rail carriers and make program changes as warranted.

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Luz D. Ortiz,

Army Federal Register Liaison Officer.

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[FR Doc. 02-8680 Filed 4-9-02; 8:45 am]