[Federal Register Volume 59, Number 167 (Tuesday, August 30, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21321]


[[Page Unknown]]

[Federal Register: August 30, 1994]


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DEPARTMENT OF DEFENSE
 

International Personal Property Program--Proposed Test

AGENCY: Military Traffic Management Command, DOD.

ACTION: Notice of Proposed Test in the International Personal Property 
Program.

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SUMMARY: The purpose of this notice is to provide advance information 
concerning a test of a new code of service to move international 
household goods (HHG) shipments under the MTMC international through 
Government Bill of Lading Program (ITGBL). MTMC is proposing to test a 
new code of service, (Code 3), for ITGBL HHG shipments moving between 
CONUS and Korea, Japan, and Okinawa, effective with the international 
summer (IS95) cycle, 1 April 1995. Carrier single factor rate (SFR) 
submissions for Code 3 service will include all charges and the 
performance services currently in the Code 4 rate except ocean freight 
charges. The Military Sealift Command (MSC) over-ocean routing rates 
will be used for the ocean segment. The terms, conditions, and rules, 
contained in the International Personal Property Rate Solicitation will 
apply. Certain provisions will be added to the MTMC ITGBL rate 
solicitation to authorize use of the MSC ocean rates by approved 
freight forwarders and will provide conditions for forwarder 
participation. The IS95 solicitation is scheduled to be distributed to 
industry in mid October, to be effective 1 April 1995.

DATES: Comments must be received September 29, 1994.

ADDRESSES: 

    1. ITGBL carrier/industry comments should be mailed to 
Headquarters, Military Traffic Management Command, ATTN: Ms. Shelly 
Johnson, MTOP-T-NP, Room 621, 5611 Columbia Pike, Falls Church, VA 
22041-5050.
    2. Ocean carrier comments should be mailed to Commanding Officer, 
Military Sealift Command, Central Technical Activity Command, ATTN: Mr. 
Doug Anderson, N-10, Washington, DC 20398-5100, with a courtesy copy to 
HQMTMC.

FOR FURTHER INFORMATION CONTACT:

    1. Ms. Shelly Johnson, POC for the International Personal Property 
Rate Solicitation, (703) 756-2383.
    2. Mr. Doug Anderson, MSC, POC for the MSC Rate Guide, (202) 433-
0415.

SUPPLEMENTARY INFORMATION: MTMC proposes testing a new code of service 
(Code 3) for international containerized HHG shipments moving between 
CONUS and Korea, Japan, and Okinawa. Department of Defense-approved 
ITGBL carriers having Code 4 approval to transport HHG shipments to/
from Korea, Japan, and Okinawa, will be automatically, unless otherwise 
requested, approved to participate in the test. ITGBL carrier 
participation and/or rate submission, is optional. The transportation 
SFR for Code 3 shipments will include all services in Item 432 of the 
International Personal Property Rate Solicitation except over-ocean 
transportation charges. MSC rates published in the MSC Container 
Agreement and Rate Guide will be used for the ocean segment. Code 3 
service will be in addition to the other established codes of service, 
such as Codes 4 and 5. Movement of these shipments will be predicted on 
the policy, administrative requirements, terms, conditions, and rules, 
contained in the International Personal Property Rate Solicitation, the 
MSC Container Agreement and Rate Guide, and are subject to the 
following requirements.

a. Operational Procedures

    Code 3 service is defined as the movement of HHG in Type II MTMC-
approved containers whereby a carrier provides origin services, 
linehaul service from origin residence to a commercial ocean terminal, 
ocean transportation (using MSC negotiated rates to a commercial port 
of discharge), linehaul to the destination residence, and destination 
services.
    The information outlines below applies to the movement of Code 3 
shipments.
    1. Authority to Use MSC Rates. The MSC Worldwide Container 
Agreement contains authority for MTMC approved ITGBL carriers to use 
MSC negotiated ocean rates. Section C-5 of the Worldwide Agreement 
defines the Government as the U.S. Government, its agents, and 
contractors. The ocean carrier is obligated in accordance with Sections 
C-4 and C-6 of the MSC Worldwide Container Agreement to transport cargo 
tendered by the Government. The ocean carrier will perform services in 
accordance with MSC contracts upon proper ordering by an authorized 
ITBBL carrier.
    2. Ordering Activity Designation. MTMC, as the Administrative 
Contracting Officer for MSC will designate ITGBL carriers with accepted 
Code 3 rates on file, as ordering activities of the Government. As an 
ordering activity of the Government, the ITGBL carrier will have 
authority to book containers on behalf of the Government within the 
limits of delegation and subject to Government oversight. Ordering 
activity authority will allow the ITGBL carrier to utilize MSC 
negotiated rates. The ITGBL carrier will be responsible for exercising 
its administrative authority in accordance with the delegation 
authority granted by MTMC, and with the terms and conditions of the MSC 
container agreement with oversight by MTMC. ITGBL carriers designated 
as ordering activities of the Government will sign an agreement 
acknowledging the terms, conditions, and responsibilities, associated 
with the delegated authority. A listing reflecting those ITGBL carriers 
designated as ordering activities of the Government will be provided to 
the MSC ocean carriers prior to the effective date of the cycle.
    3. Withdrawal of Ordering Activity Authority. MTMC may revoke the 
ordering activity authority of any ITGBL carrier who fails to comply 
with the terms, conditions, and responsibility associated with use of 
the MSC negotiated rates. This will preclude the ITGBL carrier from 
further participation in Code 3 traffic for the remainder of the 
solicitation period and cycle. Repetitive violations of ordering 
activity authority may result in removal of the ITGBL carrier from 
further Code 3 participation.
    4. Ocean Carrier Cargo Allocations. In accordance with the terms 
and conditions of the MSC Container Agreement, the low cost ocean 
carrier will be offered 75 percent of the available cargo on a given 
route. The remaining 25 percent of the cargo will be offered to other 
participating ocean carriers. All Code 3 HHG shipments, under this test 
will be offered initially to the low cost ocean carrier and included in 
the 75 percent cargo allocations.
    5. Ocean Container Bookings. MTMC will provide port information and 
administrative institutions to ITGBL carriers and adjust such 
instructions, as required, to provide for compliance with HHG 
distribution requirements. ITGBL carriers will be required to adhere to 
these instructions. ITGBL carriers will offer all Code 3 shipments to 
the ocean carrier establishing the lowest MSC rate for the applicable 
route unless instructed to do otherwise by MTMC. If the shipments are 
declined by low cost ocean carrier, a nonavailability statement will be 
issued by the ocean carrier and required to accompany the ITGBL 
carriers billing to the appropriate Defense Finance and Accounting 
Office.
    6. Container Utilization. ITGBL carriers participating in Code 3 
traffic will be required to optimize ocean container utilization. 
Imposition of utilization factors are necessary to incentivize optimal 
loading of containers since MSC rates are based on rates per 
measurement ton utilizing 100 percent of the inside cubic capacity of 
the container regardless of the actual of HHGs loaded in the container. 
(See paragraph a. 10.(b)).
    7. Coloading. To permit carriers ability to continue traditionally 
accepted commercial coloading practices, carriers may coload Code 3 
shipments. Code 3 shipments may only be coloaded in ocean containers 
with Code 3 shipments. The ITGBL carrier's Ordering Activity will be 
revoked if it is found that Code 3 and Non-Code 3 shipments are 
coloaded.
    8. Payment of Ocean Charges. The ITGBL carrier who orders services 
from the ocean carrier on behalf of the Government is responsible for 
payment of MSC ocean rates to the ocean carrier. Ocean freight charges 
shall be earned by the MSC ocean carrier upon delivery of the shipment 
to the destination named in the shipping order in accordance with MSC's 
agreements and rate guides. Payment by the ITGBL carrier shall be made 
within 30 days after receipt of a proper invoice from the MSC ocean 
carrier of evidence of delivery whichever occurs later. ITGBL carriers 
will be reimbursed for over-ocean movement costs for Code 3 shipments 
tendered to the low cost ocean carrier or when a nonavailability 
statement is provided by the low cost ocean carrier indicating the 
shipment was refused.
    9. Failure to Pay Ocean Carrier. In accordance with the terms and 
conditions of the MSC Container Agreement, the Government is 
responsible for payment of ocean charges if the ITGBL carrier fails to 
pay the MSC ocean carrier. MSC will maintain a reserve fund for use in 
paying the ocean carrier. MTMC will initiate set-off action against 
ITGBL carriers for ocean charges, applicable interest, and any other 
costs incurred for nonpayment of ocean charges. Designation of ordering 
activity authority will be revoked, and the ITGBL carrier will be 
precluded from further participation in Code 3 traffic.
    10. Reimbursement of Ocean Charges.--(a) The ITGBL carrier will be 
reimbursed for its pro rata share of the average ocean charges incurred 
by the use of MSC's contract carriers based on the net hundredweight of 
the HHG shipment. The ITGBL carrier will be paid that portion of the 
average ocean charges in accordance with the procedures set forth in 
paragraph a.10.(b).
    (b) The ITGBL carrier will be paid its pro rata share of the 
average ocean charges incurred under Code 3 shipments based on 
multiplying the net hundredweight of the HHG shipment shipped with the 
ITGBL carrier against an MSC determined ocean rate factor. The MSC 
ocean rate factor is based on dividing MSC's total ocean charges for 
the movement of a standard 40' by 8' by 8'6'' dry ocean container (40' 
standard container) of general cargo over a specific traffic channel by 
the average amount of net hundredweight of HHG 'cargo that can be 
loaded into that size container. The average net hundredweight of HHG 
cargo that can be loaded into a 40' standard container is calculated to 
be 130.41. That 130.41 net hundredweight is calculated by using a load 
factor of 10 average size Type II containers (152A) in a 40 standard 
container. At 189 cubic feet each, these 10 average Type II containers 
will hold 13,041 reduced to a hundredweight factor, divided into the 
MSC calculated per 40' standard container rate for a given movement 
shall be the applicable ocean freight reimbursement factor. This MSC 
ocean rate factor is then multiplied against the net hundredweight of 
the ITGBL carrier's shipment over that channel and the ITGBL carrier is 
paid the resulting amount. The predetermined ocean freight 
reimbursement factor for each Code 3 channel shall be computed by MSC 
and provided to the applicable paying office.
    (c) The ITGBL carrier will bill the appropriate finance and 
accounting office responsible for payment of transportation charges for 
Code 3 shipments. Over-ocean charges will be identified as a separate 
line item charge on the public Voucher for Transportation Charges, SF-
1113. An MSC Over-Ocean Charge Item will be included in Chapter V of 
the International Personal Property Rate Solicitation. This item number 
must be reflected on the SF-1113 with the over-ocean charge. All 
billings must be supported by appropriate documents identified in the 
Tender of Service, Figure A-8, of the Personal Property Traffic 
Management Regulation (PTMR), DOD 4500.34R, with the following 
exceptions; the shipping order must be submitted in lieu of billing 
document number 8, commercial ocean bill of lading, and a copy of the 
nonavailability statement must be submitted, in order to justify 
payment, for those instances where the low MSC ocean carrier refused 
the shipment.
    11. Reporting Requirements. For the period of the rate cycle (1 Apr 
95-30 Sept 95), ITGBL carriers participating in the movement of Code 3 
shipments must provide monthly summary reports to MTMC ADCSOPS-Quality. 
This information will be used to monitor payment activity to ocean 
carriers and test results. Code 3 shipments must appear on a monthly 
summary report no later than 60 days following the required delivery 
date. The report will list the personal property Government Bill of 
Lading numbers (PPGBLs), coloading and container utilization 
information. Supporting documentation that must be submitted with the 
summary report includes shipping orders for the referenced PPGBLs, a 
certification indicating the ocean charges were paid, and a 
nonavailability settlement, if other than the low cost ocean carrier 
was used. Specific information and format requirements for the summary 
report will be provided with the IS95 solicitation.

b. Rate Submission Requirements

    The rate filing instructions contained in Chapter 19 of the 
International Personal Property Rate Solicitation will apply for Code 3 
rate submissions. The following information for Code 3 rate submissions 
applies.
    Code 3 rates will be designated as Class 2. All procedures in 
Chapter 19 governing Class 2 initial filing (I/F), and me-too (M/T) 
rate submissions will apply for Code 3. Code 3 rates will be submitted 
on magnetic tapes, prepared in accordance with the established 
instructions and formats prescribed in Appendix 19A of Chapter 19. 
Submissions must be in accordance with the filing schedule provided 
with the applicable rate solicitation letter. The position number 
indicated for Code 3 on the ground specification formats contained in 
Appendix 19A will apply.
    The administrative high rate used in the I/F for Code 3 will be 
$250. The maximum M/T filing criteria for Code 3 will be the low rate 
plus $50. Code 3 rates which exceed the maximum filing criteria will be 
removed. Code 3 rates will be listed in the accepted rate 
certifications and error listings. Mistake in rate filing procedures 
for Class 2 rates as specified in Item 1908 of Chapter 19 apply. 
Records rejected during the I/F or M/T due to an error will have a 
rejection code indicated. The error description codes contained in Item 
1916 will apply. Code 3 rates will be listed on the accepted rate 
certifications and error listing. Carriers are responsible for 
reviewing and certifying the accuracy and completeness of rates listed 
on their transaction printout.
    Accepted Code 3 rates will remain in effect for the first 2 months 
of the rate cycle. Carriers may cancel accepted Code 3 rates in 
accordance with the designated cancellation filing dates and effective 
dates announced in the rate filing schedule. Carriers canceling rates 
will receive a copy of the accepted and rejected rate cancellation 
listing. The error codes for rejected cancellations are outlined in 
Item 1919.

c. Traffic Distribution

    Code 3 shipments will be distributed in accordance with procedures 
set forth for Class 2 rate channels as specified in Chapter 17 of the 
International Personal Property Rate Solicitation. The designated 
percentage of traffic offered to the low rate setter on any given 
channel will be based on the percentages reflected in the HHG tonnage 
estimates distributed with the applicable solicitation.

d. Transit Times

    The Code 4 transit times published in the PPTMR, DOD 4500.34R, will 
apply for Code 3 shipments tendered during the test period.

e. Liability

    The ITGBL carrier liability for Code 3 shipments will be $1.80 per 
pound per article. The terms, conditions, and rules, contained in Item 
410 of the solicitation will apply. None of the memoranda of agreement 
in effect with the carrier industry will be abrogated by the use of MSC 
rates. The Military Claims Services will assert demands against 
forwarders for loss and/or damage based on claims filed against the 
Government by the service member. The ITGBL carrier will act as the 
Government's claims agent against the ocean carrier in those cases 
where the forwarder can prove the ocean carrier was at fault. In the 
absence of a resolution of a claim, the ITGBL carrier and the MSC ocean 
carrier shall have the right of recourse to the MSC procurement 
contracting officer (CO) under the contracts Dispute Clause. In the 
event of such a disputed claim by the ITGBL carrier against the ocean 
carrier, the ITGBL carrier shall provide all necessary documentation to 
support the Government's claim against the ocean carrier. The 
procurement contracting officer will then issue a CO's final decision 
determining the extent to which a valid claim has been established. If 
the CO's final decision determines the Government has an affirmative 
claim against the ocean carrier, MSC will assign its rights to assert 
an action against the MSC ocean carrier for loss and/or damage to Code 
3 shipments, under the Shipping and Container Agreements, to the ITGBL 
carrier subject to the right of the Attorney General to supervise and 
control litigation directly involving the U.S.

f. Total Quality Assurance Plan (TQAP)

    The standards of service and procedures contained in TQAP, or 
latest changes thereto apply to Code 3 shipments.
Kenneth L. Denton,
Army Federal Register Liaison Officer.
[FR Doc. 94-21321 Filed 8-29-94; 8:45 am]
BILLING CODE 3710-08-M