Logistics: DoD International Personal Property Shipment Rates
Abstract
This audit was initiated in response to a Defense Hotline allegation concerning household goods shipments originating in the Mediterranean region of Europe. The allegation claimed that under current procedures Code of Service 4 DoD was paying excessive costs for ocean transportation on household goods shipments because a third party company purchased all or most of the cargo space available on U.S.-flag vessels and subsequently resold the space at an inflated price to selected freight forwarders that participated in the DoD International Personal Property Program. The complainant alleged that the excessive costs were passed on to the Government when the freight forwarders submitted new rates to the Military Traffic Management Command for approval. The Defense Hotline complaint also stated that if DoD implemented Code of Service 3 for household goods shipments, the ocean transportation would be provided under a Government contract negotiated directly with ocean carriers and all freight forwarders would pay the same rate for ocean transportation. The complaint also claimed that using Code of Service 3 would eliminate the third party monopoly and lower the overall cost of DoD household goods shipments. Between October 1, 1999, and August 24, 2002, 51,154 surface shipments of household goods were moved from 9 selected areas of Europe to the continental United States. The objectives of the audit were to: determine the validity of the Defense Hotline allegation that DoD was incurring excessive costs on personal property shipments; evaluate the effectiveness of the codes of service and rates used; determine whether procedures were in compliance with applicable regulations; and evaluate the management control program relative to the objectives. We did not complete the objective to evaluate the management control program relative to the objectives because the allegation was not substantiated and the audit was terminated.
Document Details
- Document Type
- Technical Report
- Publication Date
- Mar 22, 2002
- Accession Number
- ADA404723
Entities
Organizations
- Office of the Inspector General, U.S. Department of Defense