DOD created their own household goods capacity problem

By Eric Anders • Jun 8th, 2012 • Category: Defense Personal Property Procurement Program (DP3), Department of Defense/Military, Government Relocation Programs, Relocation and Move Management Services

DPS: Another Expensive Boondoggle

Dominos DOD created their own household goods capacity problem Earlier this week, the Surface Deployment Distribution Command (SDDC) issued the following message to the hundreds of military approved transportation service providers (TSPs) enrolled in the United States Department of Defense's (DOD) newly automated self-counseling Defense Personal Property Program, DP3.

SDDC is the executive agent for the United States Transportation Command. USTRANSCOM is one of nine unified commands of the DOD.

As part of their new DP3 program, SDDC developed a complex and very expensive internet-based move management system called the Defense Personal Property System (DPS) to manage, monitor, and more closely control the DOD's procurement of household goods moving services.

"This message is to request TSPs to tighten up their blackouts for the remainder of the peak season. While the refusal policy is an effective tool to get shipments awarded, we are seeing an increase in the number of "offer rejects" that is causing delays in getting shipments awarded. We ask all TSPs to blackout areas they are leaving open just to view the shipment and leave open ONLY those areas that they actually have some capability. This will reduce the number of offer rejects, lead to shorter award times and less rework for the PPSO communities." - Surface Deployment Distribution Command (SDDC), June 6, 2012

This sabre-rattling is in response the growing frustration and concerns recently shared by both the Military Service HQ and many Personal Property Shipping Offices (PPSO) about an increased workload after SDDC implemented their unlimited household goods shipment refusal policy to TSPs on May 15, 2012.

In the moving industry, “blackout dates” (a/k/a "saturation" or "embargo" notices) generally refers to a specific day, series of dates or period of time during which households goods carriers or their agents can no longer accept new business in certain locations, market areas, or geographic regions.

Bookings are restricted because the professional personnel or experienced moving and storage crews and trained part-time staff; local or long distance equipment or material resources, or alternative transportation capacity under their dispatch control are approaching, have reached, or have already exceeded the point of being adequate to maintain acceptable levels of service for existing customers moving locally or long distance.

In DPS, the term Blackout Dates is used to refer to a specific day, series of dates or period of time during which approved TSPs no longer wish to accept new military business being offered through DP3.

According to the Defense Transportation Regulations, this blackout date utility "allows TSPs to modify specific origin PPSO and destination region combinations by shipment category. The DPS allows real-time updates of blackout dates by TSPs to prevent new shipment awards."

This is supposed to provide TSPs with the flexibility required to manage workloads, while still allowing DP3 to maintain a pool of available transportation resources for newly registered DOD shipments.

The way the military's new procurement system is built, the use of the 'blackout date' feature in DPS may or may not be related to dwindling capacity resources.

Frequently blackout dates are used by large, well-organized household goods carriers that manage multiple military approved TSPs to manipulate pricing during busy peak periods. This practice places undue financial pressure on smaller TSPs and the local agents, drivers, and the small business assets that they represent nationwide.

The beleaguered staff at some PPSOs complained about the need to contact as many as two dozen TSPs just to service the personal property movement of one (1) military service member. Just ONE!

Unfortunately, their consternation and anxiety will probably get worse before it get better. SDDC projects to handle over 200,000 military and government related household goods moves this summer.

The concern shared by already overworked military and civilian staff at the newly consolidated military personal property shipping offices is that the busiest, most critical capacity periods of the entire year are still several weeks away – everywhere around the world!

Of course, this unexpected rework is causing a tremendous loss of both scheduling and budget control at the local PPSO level and unnecessary stress on the hundreds of thousands of military service members and their families they've been charged with trying to relocate during the busiest part of peak moving season.

Don't forget! Summer is when millions of other Americans are also trying to plan for (and compete with) the same industry relocation products and services that are estimated by some insiders to be 30% smaller than last year.

Duh!!!

After fifteen years of trying to “reengineer” their household goods (HHG) procurement program, it appears the domestic and international moving industry's largest repeat customer still doesn't 'get it'!

You'd think by now the military brass in charge of arranging the personal property moves for over a half million military and government service members and their families each year would understand the seasonal capacity issues of a moving industry that has been constantly shrinking because of them.

As usual, those in the trenches get to clean up the mess.

Irregular routes mean irregular schedules

Unlike their counterparts in the general freight transportation industry, most HHG domestic movers are non-scheduled irregular route motor carriers. They don't have clue where they're going to have available capacity at until a customer arranges a move with them.

If a customer, for instance, decides today that they want to move from Washington, DC to Chicago, Illinois four weeks from now, the only 'definite' conclusions that can be made are that:

Some type of capacity will be needed to load in Washington, DC approximately four weeks from now
That same capacity will be available in Chicago two to ten days after four weeks from now.

The decision on how to service that single customer's relocation plans are dependent on:

The number of days of advance notice the customer or client gives
The size and/or bulky characteristics of the shipment
The amount of accessorial services required or requested by the customer or authorized by the client
The material, equipment, and warehouse or dock resources required to complete the relocation
Preferred or required pick-up and delivery dates or periods of time
Type of motor carrier transportation, container, and lift capacity are needed to service the move
Amount and type of motor carrier transportation, container, and lift capacity capacity available
Customer budget
Negotiated price
Purchase transportation cost
TSP acceptance
Local agent service capability and acceptance
Driver schedule
The schedules of the driver's other customers
Driver acceptance
Access and egress restrictions
Acts of God
A change in ANY of the above

Now multiply that same scenario by hundreds of thousands of local, intrastate and interstate full service and do-it-yourself relocations that occur each day and then again by number of days in the month.

Now take that number and multiply it by the number of TSPs (both real and 'paper' transportation companies), then by the number of real local agents, and then again by the number of real DOT qualified local and long distance drivers, real trucks, and real trailers.

The whole move planning process gets a much more complicated (and less reliable) when any one component in the list above changes. Historically, 80% of each every move scheduled has something change - often within 3 days of the planned load date!

Starting to get the picture?

DPS is a Boondoggle

That's why the above directive issued by the SDDC is so ludicrous.

It's not those responsible for doing the real work of moving nor those being moved who are responsible for the cascading capacity and service problem!

Its the inane structure, unrealistic program requirements and non-compensatory pricing parameters that SDDC and their large, well funded industry partners (a/k/a stakeholders) built into the problem plagued DP3 framework.

Until someone, somewhere issues permanent change of station (PCS) orders to a military service member or government employee, no one, nowhere knows anything about where or, more importantly, when capacity is going to be required.

If SDDC really wants to fix their capacity problem and reduce the amount of inconvenience and rework for both their relocating service members and PPSO communities in the future, they need to stop pointing fingers at movers for the problems in their problem-plagued, 'Best Value' procurement program and start reengineering their internal PCS processes.

The stability and function of each part of SDDC's entire DP3 move management program depends on how solidly the first domino is set and how far it's placed in front of the one behind it.

That's an internal military planning problem, not an industry capacity issue!

Question Mark 150 x 149 DOD created their own household goods capacity problem

Is SDDC's unlimited refusal policy creating more rework for PPSO's? Movers? Relocating military and government service members?

Share your thoughts below!

Then use the "Share This" button to encourage your business associates and real industry colleagues to join the discussion.

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Military blames movers for service problems – RELO Roundtable

Military hints at review of problem-ridden DP3 program – RELO Roundtable

‘Defense Personal Property Procurement Program (DP3)’ Category – RELO Roundtable

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