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LCD-78-243 1 (1979-03-02)

handle is hein.gao/gaobaaysf0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE %WASHINGTON, D.C. 20548 LOGISTICS AND COMMUNICATIONS iDVSO I1I iIIi B-157476 108717 MARCH 2.1979 The Honorable G. William Whitehurst House of Representatives Dear Mr. Whitehurst: Your March 2, 1978, letter requested that we review correspondence sent to you by Mr. Paul G. Caplan, Chairman of the Board of Commissioners of the Norfolk Port and Industrial Authority. Mr. Caplan points out that with the recent congressional action to deregulate domestic air cargo rates (Public Law 95-163, Nov. 9, 1977), air cargo service at the Norfolk International Airport can be improved. He feels that the military will benefit by using scheduled air carriers to distribute its supplies. Therefore, he asks that we consider --identifying the military cargo which could be a candi- date for shipping through the Norfolk airport, and --evaluating the procedures by which the military distributes its supplies. We agreed to look at the effect of deregulation on the Department of Defense's (DOD's) distribution patterns and policies and to provide you with data on the volume of cargo originating in the Norfolk area. These matters were briefly discussed with Mr. Ken Scott, Executive Director of the Port and Industrial Authority, at the time of our visit with the military shipping officials in Norfolk. In summary, we found that the deregulation has had little effect on how DOD distributes its supplies and uses commercial air freight services. Generally, air freight rates are higher than the rates DOD pays for surface trans- portation, and air rates have not lowered appreciably with deregulation. DOD's policy is to use airlift whenever such service can meet customers' needs and offer cost advantages. Cost considerations include transportation charges as well as reduced investment costs which result when inventories are reduced through using expedited transportation. ,CD-78-243 > (943456)

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