Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/255292
February 2014 | Overdrive | 23 M issouri-based driver Hal Kiah was active primarily in military freight more than 10 years ago. As a company driver with Tri-State Motor Transit then, he was paid 23.5 percent of the load. Back with Tri-State this year for a brief period, however, mileage pay prevailed, and Kiah got a bet- ter sense of where the market for military freight had gone. "Competition is up," Kiah says, for both security-sensitive arms, ammu- nition and explosives – or AA&E, typically the better-paying type of military freight – and general govern- ment freight (FAK). Like any kind of general-type freight, he says of the latter, "everybody's out there trying to make the best bid they can possibly make to be profitable." Kiah isn't alone in his assessment. With the federal government increas- ingly outsourcing its logistics, those who've made it into the military hauling niche find that rates aren't what they used to be. The Department of Defense "does a great job of keeping prices compet- itive," says Ted Alling, chief executive officer of Access America, a Chattanoo- ga, Tenn.-headquartered brokerage that deals with DOD shipping sites for gen- eral freight. Alling says Access America also does some business with Menlo Worldwide, which manages about 44 percent of all nonsecurity-sensitive mili- tary freight more than 150 pounds. So strong is the competition that three out of four owner-operators report rates for military freight have dropped over the last five years, ac- cording to a survey of Overdrive readers. Some longtime owner-operators blame the federal Defense Transpor- tation Coordination Initiative for that. The DTCI brought on Menlo in 2007 to cut shipping costs as a third-party logistics manager contracted by the Surface Deployment and Distribution Command. Commercial practices "not normally embraced by the govern- ment" are being used to produce the savings, says SDDC Public Affairs Officer Mitch Chandran. There are no plans to expand DTCI further to include other shipping sites. At the time DTCI was being imple- mented, Landstar-leased owner-operator Bryan Manley says he commonly ran loads out of Fort Bragg, N.C. After the How have rates trended in military freight over the last five years? Down 76% Stable 12% Up 7% Down for FAK, up for AA&E 5% OverdriveOnline.com poll Overdrive readers report gloomy rate trends in the military freight business despite ongoing favor for the day-to-day of the niche. Following the late-2010 advent of the Com- pliance, Safety, Accountability program, the military began using CSA's Safety Measurement System percentile rankings to place requirements on newly approved and existing carriers of general and high-security freight. It's a prime example of how shippers are using the SMS — a ma- jor component of the Federal Motor Carrier Safety Administration's CSA initiative — as a tool in making business decisions. For a new carrier to be approved for general freight, the carrier's BASIC percentile rankings all must be below FMCSA's specified intervention thresholds ( see below). Carriers interested in hauling security-sensitive freight must meet the hazmat-specific intervention thresholds. For already-approved carriers whose percentiles cross those lines, the Military Freight Traffic Unified Rules Publication specifies certain requirements for written get-well plans you can find via docketing. sddc.army.mil/mfturp2.pdf. Ratings play heavily in military hauling CSA score upper limits for approval as a carrier with SDDC FAK AA&E Unsafe Driving 65 60 Hours of Service Compliance 65 60 Driver Fitness 80 75 Vehicle Maintenance 80 75 Controlled Substances/ Alcohol 80 75 HM Compliance 80 80 Crash Indicator 65 60 CS_Military_Hauliong.indd 23 1/28/14 10:56 PM