[Federal Register Volume 67, Number 69 (Wednesday, April 10, 2002)]
[Notices]
[Pages 17415-17416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8680]


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DEPARTMENT OF DEFENSE

Department of the Army


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

AGENCY: Department of the Army, DOD.

ACTION: Notice.

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SUMMARY: 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).

DATES: Effective June 1, 2002.

FOR FURTHER INFORMATION CONTACT: Mr. Frank Galluzzo, MTMC, (703) 428-
2327.

SUPPLEMENTARY INFORMATION: 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

[[Page 17416]]

motor 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.

Luz D. Ortiz,
Army Federal Register Liaison Officer.
[FR Doc. 02-8680 Filed 4-9-02; 8:45 am]
BILLING CODE 3710-08-M