RELO Roundtable…a gathering place

Thanks for the feedback, Chuck. Actually the published DPS stats you mentioned and my observations are both accurate. Perhaps it’s my interpretation of the data that’s misguided. If so, I hope someone will help me understand the program better. Here’s my take… Of the 374,800 shipments processed in 2010 under the expanded DPS system, 28,305 military members have filed claims under the new guidelines. ( 28,305 / 204,335 = 13. 85%)By industry standards, this ‘claims submitted’ percentage seems relatively low. In fact, the number appears quite innocuous taken by itself and much less worrisome when compared to past military personal property program results and overall industry averages. Claims, however, are a significant component of customer satisfaction. In the commercial environment, most responsible movers work diligently to try to quickly and equitably resolve personal property snafus, cargo damage, and inconvenience (delay) issues to boost their customer service performance rating results with their individual clients and improve their overall reputation in the marketplace. Historically, the turnaround time for most claims is under 30 days. This usually has a positive affect on how each customer rates their carrier’s performance and increases the intrinsic value of the level of service provided. Under the new DPS rules, however, the SDDC requires that ALL reassigned transferees and their families undergoing a domestic or international permanent change of station (PCS) move complete the DOD’s unique 12-question Customer Satisfaction Survey within seven (7) days of receiving the delivery of their household goods. (See the article below on how the Recency Effect influences last impressions)This self-imposed internal feedback requirement combined with the military’s new full-value replacement coverage means military members with any type of claims issue are openly encouraged by the program’s administrators and privately incented by their family’s personal situation to quickly submit their CSS report card – before the carrier has even had a chance to receive, review and process any potential claims or resolve other outstanding customer service issues. If every service member completed their CSS filing responsibilities according to SDDC’s new DPS program requirements, the number of ‘Surveys Submitted’ should approach 200,000. Despite the military’s repeated instruction and constant cajoling, however, only 37,000 members have dutifully returned their feedback forms through the end of September. Recently I read/heard that SDDC now hopes to achieve a 30% return rate under their new self counseled move management program. Even at that much lower number, the result should still be over 60,000 survey’s returned in 2010. The reality, however, is that only 19% (37,498 / 204,335) of the relocated service members have submitted their CSS forms as instructed. Compare the 28,305 ‘Claims Submitted’ against the 37,498 ‘Surveys Submitted’, and you’ll find that 75% ( 28,305 / 37,498) of the transferees who completed their CSS surveys filed claims against the TSP that handled their move. (This is the calculation I reported in the last paragraph of the article above and the one Charles took issue with.) This perspective was used because, under SDDC’s current business rules, CSS scores make up 50% of each participating TSP’s ‘best value’ score. Essentially that means of the 375,000 shipments processed by ALL military approved carriers, only 19% of the completed moves potentially could have a significant bearing on each of the surveyed TSP’s best value scores. Remember – 75% of those fulfilling their CSS responsibilities were disappointed or angry enough with their service to file a claim against their mover. The CSS results help determine which TSPs are used to move the personal property of DOD Service members and civilians in the future. Under the new business rules, however, it is possible (as I understand it) for a TSP with a lower overall performance score affected by bad customer service to reduce their rate to get a higher Best Value Score (BVS).While this manipulation of price provides a short-term benefit to lower ranked TSPs whose BVS were adversely affected by low CSS scores (completed, incidentally by a mere 19% of the entire population of relocated DOD service members according to SDDC published results ), in reality it affects ALL carriers who participate in the channel by forcing them to file ‘competitive’ rates that meet SDDC’s ‘rate reasonableness’ test. This not only has an adverse affect on every TSP’s future pricing strategy, but casts a shadow on the entire moving industry because of the way the ‘best value’ business model drives down price and drives away potential service providers. That fact made itself quite evident during the peak season of the DPS program’s inaugural roll-out when many of the well-qualified van operators and local agents on whose back rests the responsibility of satisfying every DOD members service requests and relocation expectations balked at participating in military traffic at DP3′s cut-rate pricing parameters and elevated claims exposure. As capacity shrinks, service suffers! In the future, every time a disappointed military transferee dutifully completes their CSS form and then submits their DPS claim against their TSP, more pricing pressure is put on the competitive rates filed by all carriers. This, of course, will negatively affect service. Which will affects rates…blah, blah, blah! For those who took the time to read about one single mom’s PCS nightmare with her two-year old son in the article above, she reports it cost the carrier $600 in inconvenience claim reimbursements just to handle her small self directed move this summer. Unfortunately, the Sergeant doesn’t mention if the payout included other expenses the carrier might have incurred that would have been included the member’s full value replacement coverage. The monthly DPS Raw Numbers published by SDDC don’t reflect the amount paid out by carriers on the 28,305 claims already submitted under DPS. At $600 bucks a pop to move a small family of two, however, the potential cost to industry is staggering under the military’s newly re-engineered procurement program. And, to some, that unknown exposure is especially disturbing!

Please … someone tell me if that’s the wrong way to look at this new data.