eGov/Mil Newsletter: December 4, 2015
In this Issue:
- IAM Visits SDDC
- SDDC Issues 2015 IT-Change 2
- Annual Requirement to Update CIP & COR Announced by SDDC
- 2016 Defense Personal Property Program (DP3) Rate Filing Notice
- Azores and Rate Filing Advisories posted by SDDC
- Congress approves 5-year highway bill that dismantles CSA, Obama to sign
- DOD & Government Personal Property News & Notes
On Wednesday December 2 IAM senior staff Terry Head and Charles White visited with personnel from the Surface Deployment and Distribution Command’s (SDDC) personal property directorate at their Scott Air Force Base headquarters. Attending the meeting alongside IAM staff was Mike Connolly from Pasha, representing the agents of the International Shippers Association (ISA).
The discussion covered myriad issues but primarily focused on a number of proposed changes to the 2016 Solicitations (International Tender and 400NG). SDDC has been holding the distribution of those solicitations until a number of contentious issues could be discussed during this meeting.
The SDDC staff in attendance included Lt. Col. Todd Jensen, Danny Martinez, Rosia Lindsey, David Jones and most of the SDDC “Rates Team”. Also in attendance from the SDDC G-3 (Operations) Division were Todd Goetz and Jerome Colton, who are responsible for the handling of foreign flag waiver requests for SDDC and work closely with MARAD on reviewing those requests.
To open the meeting, a short history lesson on the evolution of the International Shippers Association and the role of the ISA agents was provided. A number of questions from SDDC regarding ISA and their role in procuring ocean transportation for the industry have come up in the past year. SDDC had little understanding of how ISA came into being and how they work on behalf of TSPs. This lack of understanding opened the door for SDDC to question the true nature and value of ISA to DOD and the DP3 program.
Mr. Head and Mr. Connolly did an excellent job of framing ISA and the ISA agent’s role and also helped the SDDC personnel understand how ISA helps DOD add stability to their program.
That led into a discussion on the proposed 2016 International Tender, which was to include a requirement for transportation service providers (TSP) to provide an ocean bill of lading (OBL) from the actual ocean carrier to verify all invoicing for bunker fuel surcharges (BSC). SDDC proposed wording that would have also required that the BSC calculation be made based on weight vs. volume on the actual Ocean Carrier’s BOL.
We believe that SDDC is now convinced that this idea is not feasible. TSPs are not the direct customers to the US Flag Carriers in most cases and TSPs cannot force those carriers to meet this mandate. Mr. Connolly, as the ISA agent, was able to offer some compromises that we believe are amenable to SDDC. Now that SDDC has a better understand ISA’s role, SDDC will accept the ISA agent’s “house” BOLs, which lay out the BSC attributable to each shipper in a container, as the documentation needed to approve BSC invoices. The ISA agents will also work toward assembling a way to post online historical data of bunker costs that can be reviewed for audit purposes when necessary. SDDC indicated that original proposed requirement will be removed from the IT-16.
Following that discussion, a long dialog ensued regarding Foreign Flag waivers and in particular the situation regarding recent changes to U.S. Flag offering in the Pacific Northwest (PNW). Mr. Colton and Mr. Goetz led this discussion and were quite open and to the point in their dialog.
It was made quite clear that TSPs cannot expect to see any relief with regard to increased foreign flag waivers in response to the current environment in the PNW. Any FF waiver requests will be reviewed individually and, unless some unique circumstances exist, they will normally not be approved under the current conditions in the PNW. TSPs will be required to move shipments to the Port of Oakland (800 miles from Seattle), where full U.S. Flag service (P1) is available. They stressed the point that if P2 (part U.S. Flag, part foreign flag) service is available out of Seattle/Tacoma that does not supersede the use of P1 available in Oakland. FF waivers would not be granted for that P2 service. They reminded us that P2 requires a FF waiver approval in order to be utilized.
Other specific proposed changes to the International Tender were also discussed:
- Removal of mini-storage charge when the primary location (Block 19 of the GBL) was a mini-storage warehouse (Item 215) – This was discussed and debated at length. SDDC finally indicated they would discuss our position further internally.
- Crating – New proposed requirement would have mandated that a “TSP must bill on the actual cubic foot dimensions of item regardless of the cubic feet of the container provided by the TSP.” IAM felt this was an untenable requirement and after some discussion a bit of a compromise was reached. IAM promised to provide SDDC further feedback on normal industry standards and practices for deciding how large to make a crate for an item once the actual dimensions have been determined. That information via feedback from IAM’s Agent Advisory Committee has already been provided to SDDC and we are hopeful that viable compromise language will be included in the IT-16.
- Reweigh process – One proposed rule would not allow billing on a shipment until a requested reweigh had been completed. That would include not allowing the billing for linehaul charges if a reweigh had been requested, but not accomplished, before a shipment went into storage. No definitive resolution on this proposed solicitation change was reached but we believe that all parties realized that significant confusion exists around how the reweigh request process is intended to work. SDDC has indicated they plan to put out messaging outlining the entire process and how it is supposed to work in DPS. This is still a huge issue that remains cloudy regarding how SDDC will proceed with the proposed solicitation change.
- Change in the size of flat screen TVs that are allowed to be crated – The initial proposal was to increase the size from 60” to 80”. SDDC has decided to reduce that to 75” based on size limitations for the standard TV boxes currently in use by industry.
- Transit Times – Unbeknownst to IAM, SDDC staff indicated they have already increased some transit times after a review of RDD data. That information has not yet been updated in the DTR or been shared with industry. They promised that an update to the transit time tables is forthcoming. Our understanding is that changes were only made in the international market. No changes in domestic. SDDC staff also indicated they understood the need to update transit times for Bahrain as it enters the normal DP3 program. Adjustments will be made in the Bahrain to U.S. channels (approximately 75 days) and Bahrain to other countries (approximately 90 days).
- Alcohol in DOD shipments – The change in the tender will allow TSPs to bill for custom broker charges directly to the government, other than duties and fees that are directly attributable to the servicemembers. This is a huge win for industry. Exact wording below:
Transportation SRF WILL NOT INCLUDE:
Fees that are uniquely associated to the presence of alcohol and supported by a third party invoice. Third party providers are prohibited from collecting fees from the customer and TSPs are prohibited from billing customers directly for fees with the exception of excise taxes, duties, and fees assessed on the Customs and Border Protection Form 7501.
The increase in the number of punitive actions taken at the Joint Personal Property Shipping Office – South Central (HAFC) was raised. SDDC said they were aware of HAFC’s recent actions and had been in discussions with them. But our major take-away was that there was not any push from SDDC to curtail their actions. If HAFC is following the business rules, we do not believe that SDDC will try to restrict their current thinking.
The meeting was incredibly worthwhile and helped to further a more open line of communication with SDDC personal property leadership.
On Dec. 1, SDDC posted Change 2 to the 2015 International Tender. A number of important changes are included in the Change, which was backdated to have an effective date of Nov. 17.
There a number of minor changes but the most critical changes are listed below. However, all of the changes should be reviewed carefully by the membership:
1) Regionalization Update: The following changes become effective January 1, 2016:
Alabama (AL): Transferring responsibility of the Logistics Readiness Center (LRC), Fort Rucker, AL (FHAT) to JPPSO-SE, Jacksonville, FL (CNNQ)
Kentucky (KY): Transferring responsibility of the Logistics Readiness Center (LRC), Fort Campbell, KY (FAAT) to JPPSO-MA, Fort Belvoir, VA (BGAC)
Japan (JA): Transferring responsibility of the Logistics Readiness Center (LRC), Camp Zama, Japan (QFAC) to JPPSO Japan Yokosuka, Japan (QENQ)
2) Item 221.c – Foreign Flag Waiver language added:
NOTE 2: TSP must provide a detailed list of all GBLs they are requesting to be moved under the Foreign Flag waiver request. The request will contain Customers First and Last Name, GBL #, Weight, and RDD for all shipments tendered to them.
3) Item 223 b.7 – Application of Transportation SFR – HHG: Added language regarding Customs Fees for alcohol
Transportation SRF WILL NOT INCLUDE:
7) Fees that are uniquely associated to the presence of alcohol and supported by a third party invoice. Third party providers are prohibited from collecting fees from the customer and TSPs are prohibited from billing customers directly for fees with the exception of excise taxes, duties, and fees assessed on the Customs and Border Protection Form 7501.
NOTE 1: Charges will only be considered when DOD specific and/or temporary in nature.
NOTE 2: TSP will provide a copy of the third party invoice associated to a shipment containing alcohol to the PPSO for review. PPSO will review and contact the TSP for further explanation as required. TSP will invoice charges under Item 223a with a note explaining “Alcohol shipment”.
Editor’s Note: This is a HUGE win for industry. Bottom Line: Alcohol-related customs broker fees are now billable directly to the government!
4) Item 505 – Reweighing
Added the following language:
The TSP must enter the shipment weight into DPS prior to the shipment arrival to allow the customer or PPSO the opportunity to request a reweigh.
5) Item 513 – Fuel Surcharge (CONUS)
Added the following language:
b. 513B - The fuel surcharge rate to apply for shipments delivering into SIT domestically is the prevailing rate for the requested pickup date at time shipment was offered and accepted.
Editor’s Note: Each year Department of Defense (DOD) approved Transportation Service Providers (TSP) must update their Certificate of Independent Pricing (CIP) and Certificate of Responsibility (COR). Recently (Nov. 4), the Surface Deployment and Distribution Command (SDDC) announced the dates for the period during which the annual updates must be completed.
The CIP and COR must be update between Nov. 5 and Dec. 21.
It is critical that each TSP complete the update in a timely fashion. Failure to do so may result in a TSP not being able to file rates for the 2016 Annual Cycle.
Do not wait. Complete these updates today.
SDDC-PP ADVISORY 16-0013
DATE: 4 NOVEMBER 2015
FROM: SDDC-PP SCOTT AFB, IL
TO: DOD-APPROVED PERSONAL PROPERTY TRANSPORTATION SERVICE PROVIDERS (TSP)
SUBJ: ANNUAL QUALIFICATIONS CERTIFICATE OF INDEPENDENT PRICING AND CERTIFICATE OF RESPONSIBILITY REVIEW
1. It is mandatory that all Transportation Service Providers (TSPs) update their Certificate of Responsibility (COR) and Certificate of Independent Pricing (CIP) in the Defense Personal Property System (DPS) before the 2016 rate cycle. Updates can be made starting Nov 5, 2015 and MUST be completed by Dec 21, 2015.
2. Request all TSPs go into DPS to review, update and submit CIP/COR documents for approval. Once completed, you must ensure the documents are in "UNDER REVIEW" status and not in "IN PROGRESS" or "SUBMITTED" status. ONLY the President or CEO can certify and submit the CIP/COR documents.
3. Failure to update your qualification documents will preclude you from filing rates. Questions may be sent to firstname.lastname@example.org.
4. Reminder, please note SDDC will no longer be providing telephonic reminders for the CIP/COR and other qualification documents.
5. This message is approved for release by David Jones, Lead, PP Operational Support and Quality Team, HQ SDDC.
Source: IAM & SDDC
On Nov. 23, SDDC issued the required Rate Filing Notice to industry, which officially announced the dates for the 2016 rate filing.
Rate Filing Dates/Times:
Round 1: 10 Jan 16 (6:00 PM CST) – 15 Jan 16 (6:00 PM CST)
Round 2: 01 Feb 16 (6:00 PM CST) – 09 Feb 16 (6:00 PM CST)
Along with the dates for the 2016 rate filing came the release of the 2016 Minimum Performance Scores (MPS) for each of the Defense Personal Property Program (DP3) Markets, which become effective on May 15, 2016.
The Minimum Performance Score (MPS) for the 2016 Rate Cycle is set at 51.67 for Domestic Household Goods, 54.25 for International Household Goods and 57.77 for International Baggage Markets.
The new MPS levels have raised some concerns for IAM and those concerns have been communicated to SDDC.
The basis for the concern is as follows:
2016 Jan 1 - May 14 Performance Period Mean - dHHG 85.66; iHHG 84.00; iUB 86.72;
2015 Jan 1 - May 14 Performance Period Means - dHHG 87.19; iHHG 83.39; iUB 86.80
The domestic Market has seen a drop of 1.53 points, the international has increased slightly by 0.61 points and the UAB has decreased 0.08 points over the last year.
Current MPS – dHHG: 50.10 iHHG: 52.80 iUB: 57.00
2016 proposed MPS – dHHG: 51.67 iHHG: 54.25 iUB: 57.77
2016 MPS Increases by Market:
Domestic - +1.57 pts - 3.13% increase
International HHG - +1.45 pts - 2.75% increase
Baggage - +0.77 pts - 1.35% increase
CSS Scores necessary to achieve the Proposed MPS for 2016
dHHG - 51.67 (57.67/70%) = 73.81 CSS score
iHHG - 54.25 (54.25/70%) = 77.50 CSS score
UAB - 57.77 (57.77/70%) = 82.53 CSS score
Questions/Issues these numbers raise:
- The general trend over the last year seems to be a decline in the mean CSS scores. Why then are the MPS continuing to climb?
- How high can the MPS rise in the future?
- If a member scores a TSP as "GOOD" (second highest score on each question) on every CSS question that would equate to a CSS score of 75 (5 questions at 9 points each = 45 pts + 30 points on the last question = 75 total points). In both International Markets the “Good” level falls below the 2016 MPS.
- Is this fair?
All of these numbers and questions have been addressed to SDDC but it appears no change in the MPS will be forthcoming.
All IAM members need to closely monitor their CSS scores to ensure they do not fall below the MPS. Falling below these levels will remove a TSP from the Traffic Distribution List for an entire Performance Period at a minimum.
Azores and Rate Filing Advisories posted by SDDC
There have been a few new advisories posted on the What’s New section of SDDC’s webpage. These advisories are dealing with new Code of Services being booked for HHG shipments involving Azores, as well as the upcoming Rate Filing rounds for TSPs.
The Azores shipments are being changed from Code 4 shipments to now being booked as Code J, T, or One Time Only shipments. This change is effective immediately but any shipments already booked will continue to move as their original Code of Service. This is driven by changes required by the 2014 National Defense Authorization Act, and changes cancellation of government arranged ocean liner service which has significantly limited surface cargo capability to the Azores and a change in the tour length from 24 months to 12 months.
Congress approves 5-year highway bill that dismantles CSA, Obama to sign
The U.S. Senate passed by an 83-16 vote late Thursday, Dec. 3, the five-year, $305 billion FAST Act surface transportation funding bill, meaning the legislation is only President Obama’s signature shy of being enacted. The bill includes a number of trucking regulatory reforms, and it will, upon enactment, remove carrier rankings in the federal Compliance, Safety, Accountability program from public view.
The bill also expands driver drug testing options and tries to institute measures to increase transparency in the Federal Motor Carrier Safety Administration’s rulemaking process. For more on the trucking-relevant topics in the FAST Act, see CCJ’s in-depth report here.
New Navy E-mail Box for Documents
The new navy email box used to provide documents to Navy sites is intended only for document submission. No other forms of communication with Navy JPPSOs/PPSOs should utilize this new tool.
The following is the original communication on the use of the email received from the Navy POC:
The Navy now has a centralized e-mail account for the TSPs to send in their rated B/Ls, inventories, 619-1s, and other supporting documentation for all Coded HHGs/UB shipments. This does not currently pertain to NTS documentation. That will be rolled out at a later phase. This applies to the following GBLOCs: BGNC, CNNQ, JENQ, LKNQ, MLNQ, and QENQ. We anticipate that the remaining Navy sites will be added in calendar year 16.
This centralized e-mail account will be monitored by our Center of Excellence team who will then transfer the documents into our electronic document storage system, called TRIM. Each of our JPPSOs has access to TRIM so they can look up the documents as they need them.
New centralized account: NAVY_HHG_DOCS@navy.mil.
We ask the TPS follow these business rules.
1. In the e-mail subject line, please put the complete GBL number. (This way it will make it easier to search if there is a need to.)
2. That each e-mail contains the supporting documents for ONLY ONE customer/GBL. Some TSPs are sending multiple GBLs in one e-mail, we then have to split it apart in order to get our documents to flow into our electronic document storage system (TRIM).
3. This is a RECEIVING only e-mail account. The only e-mails being sent to this account are the required supporting documentation that the TSPs are required to submit. This e-mail account is NOT to answer any questions or do any research that the TSPs may have. If the TSPs are looking for answers on something, they need to use the same e-mail accounts at each JPPSO they are currently using to ask those questions.
4. TSPs are only to send the supporting documents ONE time and to this ONE e-mail account- Navy_HHG_DOCS@navy.mil . Please do not submit duplicate documentation or e-mails as this will bog down the process as the technicians have to review each e-mail to ensure we are not processing duplicate documentation.
Please note: That once the TSP starts forwarding their supporting documents e-mail to the new account the TSP will no longer be required to forward the same e-mail to the particular JPPSO. Our goal is to alleviate our staff at the JPPSOs from having to receive and TRIM documents.
SDDC What’s New
- IT-15 State GBLOC Item 500 Table Change 1
- Update to Application of Transportation Single Factor Rate (SFR) for International One-Time-Only (iOTO) and International Boat One-Time-Only (iBOTO) Shipments
Household Goods Channeling Concept Pilot
The comment period for the U.S. Transportation Command’s (USTC) proposed pilot program, The Household Goods Channeling Concept Pilot Program, closed on Nov. 9. The website used to receive comments indicates that 57 sets of comments were submitted. All comments are available for review.
IAM comments are available for review on the IAM Website.
The indication is that a response to the comments should be available on or about 30 days from the closing of comment submission (approximately Dec 9). IAM continues to closely monitor the issue and is currently working to engage and educate a number of congressional offices on the issues in case there is a need to ask for their assistance in the matter.
IAM Senior VP Chuck White to Speak at CMSA San Diego/Imperial Counties and Central Valley Chapter Meetings
Chuck White will be the headliner at the CMSA San Diego/Imperial Counties Chapter meeting. He will speak about the current state of the industry. The meeting will be on January 13 at Tom Ham’s Lighthouse in San Diego and tickets are $50. Register now to reserve your seat. The next night, Mr. White will be speaking again, this time at the Central Valley Chapter, held in conjunction with a Texas Hold-Em poker tournament fundraiser. Dinner reservations are required.
UCR & SAM Registrations
Transportation Service Providers (TSPs) must ensure that they are properly registered in the System for Award Management (SAM) and also have their 2016 Unified Carrier Registration (UCR) completed. Both of these requirements are necessary for a TSP to maintain approved status in the Defense Personal Property Program (DP3) and to be able to file rates in the upcoming 2016 DP3 rate filing.
IAM Military News and Resources Page
The IAM Military News and Resources page provides military-based information in an easy-to-navigate tabbed format. In addition, IAM is linking to SDDC Personal Property updates and categorizing them by topic. Currently, on the SDDC website, these updates are hard to find and are organized chronologically – not a very user-friendly way to display information. This new system on the IAM site should make it easy for IAM members to easily find the important information they need. Contact Carl Weaver.