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PLRD-82-61 1 (1982-04-06)

handle is hein.gao/gaobabdcb0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE I 7q WASHINGTON, D.C. 20548 pR URMV , LO@TI31 . AM RADINM DIVMION B-159783 APRIL 6, 1982 The Honorable Caspar W. Weinberger The Secretary of Defense Attention: Director, GAO Affairs 117998 Dear Mr. Secretary: Subject: Use of Shipper Associations Would Reduce DOD's Transportation Costs (PLRD-82-61) Our recent survey of the Department of Defense's (DOP's) freight consolidation practices indicated that the Department could save several million dollars annually by using selected nonprofit shipper associations to transport less-than-truckload (LTL) freight shipments over long distances nationwide. By not using these associations, DOD is depriving itself of an economi- cal source of transportation that is extensively used by several firms in the private sector. These associations not only save firms money, but they also appear to provide service equal to or better than that provided by commercial carriers. DOD has not used the services of shipper associations because some officials believed that it was illegal to become members of such associations. However, after discussions with key officials at the Military Traffic Management Command, DOD officials appeared willing to pursue the use of selected ship- per associations, assuming they could obtain appropriate authori- zation and guidance. Although we planned to perform more detailed audit work to further develop our findings, this willingness to explore the concept of shipper associations makes further audit effort unnecessary at this time. BACKGROUND According to DOD transportation regulations, freight ship- ment consolidation offers a substantial cost savings not other- wise available when each of several small, compatible shipments are shipped separately. Consolidation is a procedure whereby two or more small lot shipments are consolidated into one container or into a single shipment or where LTL shipments are combined into carload or truckload shipments on one bill of lad- ing. The objective of freight consolidation is to take advantage of the lower rates available on larger shipments. (943363)

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