Daycos News

The DPS 400NG-2010 Tariff and DPS International Tender-2010 have been posted to the SDDC website. Judging by the amount of red ink contained in each of the documents, there are a lot of changes which TSPs need to be aware of before the upcoming rate filing.

Daycos is reviewing the updated tariffs and we will provide some comments later concerning some of the changes.

During recent DPS invoicing conference calls, there has been some discussion of the applicability date of the fuel surcharge. We have always applied the fuel surcharge based on the date of the service, but we have noticed the DPS rating engine is applying the fuel surcharge for linehaul service based on the original pickup date, even if the shipment was placed in origin SIT. It was a minor difference, but one we asked SDDC to clarify, since the TR-12 Fuel Policy, which governs the application of fuel surcharge, is unclear on this point.

SDDC addressed this issue during the invoicing calls, and stated DPS is rating these shipments correctly, and the linehaul fuel surcharge should always be based on the pickup date, even if the shipment went into origin SIT. During the subsequent discussion of this issue, some statements were made by SDDC personnel that led many on the call to believe that SDDC was saying that the pickup date always governed the fuel surcharge application date, even on deliveries out of destination SIT. This would have been a major change in policy and potentially impact a large number of shipments.

We asked for further clarification from SDDC on whether it was their intent to have the fuel surcharge application date always governed by pickup date, even in cases of destination SIT. This morning, we had a chance to discuss this issue with SDDC personnel and they stated that it was not their intent to make that change. They stated that the fuel surcharge on linehaul (DPS Item Code 16A) should be based on pickup date if shipment went into origin SIT, but that in cases on delivery out of destination SIT, the fuel surcharge for delivery out(DPS Item Code 16B) should be based on the date of the delivery out, not pickup date.

While we still believe that the fuel surcharge should always be based on date of service, we will accept their interpretation that fuel surcharge is based on pickup date in cases of origin SIT, and will change our programming accordingly. We appreciate their efforts to clarify the larger issue, and we were very relieved to hear they were not making that policy change.

The price of fuel was $2.78 per gallon as reported on Monday, February 1, 2010 making the upcoming FSC rates for the period 2/15/10 through 3/14/10 as follows:

GBL Domestic HHG / International HHG & UB - 3%
GSA Domestic HHG - $0.28
GSA International HHG and BAG - $0.28

Last Friday, SDDC announced that the DPS rate filing schedule for the upcoming year. Round 1 will be March 10-20, 2010 and Round 2 will be March 29-April 2, 2010. You can view the entire message on SDDC's website.

There are a couple of other resources posted that may be of interest as well.
• They have also posted a Rate Filing Overview (pdf) containing an overview of the rate filing process, instructions with screen shots, and frequently asked questions and answers.
• Also, there is a Rate Filing Instructions (pdf) document, dated 1/21/10, although the change log does not indicate any changes.
• A Channel List and sample Rate Filing Files
• Finally, they have posted and updated Rate Filing Rules (pdf), with the following changes noted in the change log:

  Editorial corrections and additional clarifications as indicated. Replaced “Families First” with “Defense Personal Property Program” and “Rate Reasonableness with “Competitive Range” throughout

Late last month, SDDC posted an Excel spreadsheet containing the 2010 400NG baseline rates to their website. It was the first time the rates were posted by SDDC, instead of provided by AMSA, but the real difference was not who supplied the rates, but how they were supplied.

SDDC posted the rates on their website, in a publicly accessible document formatted in Excel. It is likely this method and format was chosen to make it easier to be viewed by the human eye. Previously, the 400NG had always been considered an “electronic tariff”, meaning that the baseline rates were only accessible via computer software. If you wanted to calculate a rate, you fed the shipment parameters into a computer rating engine, and the computer did the calculations. The baseline rates were there, but they were hidden from human eyes, intended to be read only for computer systems. To manually calculate the rate for any line item was virtually impossible.

Now, the baseline rates are available to everyone with an internet connection and Excel. However, this does not mean that now it will be easy to manually figure every line item on every 400NG invoice. It is important to remember that the 400NG was designed to be an electronic tariff, and it was always assumed that a computer would be making the calculations, not a human using pen and paper. Ease of calculation and clarity were not primary goals in the design of the tariff. This is apparent if you try to do the manual calculation of a 400NG invoice. While this publication of baseline rates makes it possible to manually calculate rates, it does not make it practical.

The risk that TSPs face with the publication of these rates is that PPSOs may attempt to verify line item amounts using this spreadsheet. While SDDC has long held the position that the only responsibility of PPSOs is to verify that services were performed in the quantities billed, many of the PPSOs feel that their fiduciary responsibility compels them to verify that the amount billed is correct. Since the 400NG has been an electronic tariff, it has been impossible to do this, which has led to frustration by some PPSOs.

The posting of this spreadsheet now gives the PPSO the opportunity to verify rates. However, given the complexity and design of the 400NG, it will be challenging for them to do this. Manually calculating these rates could lead to incorrect calculations, which could cause accurate invoices to be incorrectly denied. Even if a PPSO disputed a charge and asked for explanation of a discrpency, the process of walking someone through a 400NG rating calculation is difficult, cumbersome and time consuming for both parties.

In general, Daycos is supportive of the move by SDDC to make the 400NG more accessible. However, merely posting the baseline rates can only be a first step. Either clear guidance needs to be give to PPSOs about how to utilize the rates (or guidance to not utilize them), or SDDC needs to take steps to simplify the tariff, which could be a daunting task.

The Daycos January Monthly Newsletter has been sent out, and can be viewed here. A few of the topics in this month's newsletter include:

SDDC Makes 400NG Rates More Accessible
Santa Visits Daycos
Daycos AccuBill Guide Updated

If you did not receive an email with this month's newsletter, but would like to receive it directly each month, please feel free to subscribe here: Daycos Newsletter.

During their recent Annual Meeting in Orlando, the International Association of Movers conducted a series of knowledge lab sessions on various topics. During one of the sessions, Chuck White from IAM, CJ Dabo from Interstate, and I participated in a panel discussion on the topic of DPS and DPS Workarounds. IAM has recently posted videos of all the knowledge lab sessions online, including the DPS session.

You can view the video of the DPS knowledge lab session below:

DPS Work-Arounds from IAM Annual Meeting on Vimeo.

The price of fuel was $2.80 per gallon as reported on Monday, January 4, 2010 making the upcoming FSC rates for the period 1/15/10 through 2/14/10 as follows:

GBL Domestic HHG / International HHG & UB - 3%
GSA Domestic HHG - $0.29
GSA International HHG and BAG - $0.29

The Daycos office will be closed on Friday, January 1st, due to the New Years Holiday. Our regular office hours will resume on Monday, January 4th.

We would like to wish everyone a very Safe & Happy 2010!

This week SDDC posted the 400NG baseline rates that are effective January 1st, 2010. Previously, these rates have been provided by AMSA, which previously owned the 400NG tariff. However, in light of the decision last year by the Surface Transportation Board to remove antitrust immunity, AMSA is no longer claiming ownership of the tariff. This cleared the way for SDDC to take ownership of the tariff, and this publication is the first step in that process.

Our understanding is that SDDC agreed with AMSA's calculation on the General Price Adjustment built into the 400NG, and that will be a 0.8% increase for 2010. However, there was some disagreement about how to apply this increase to the baseline rates, and contrary to AMSA's opinion, SDDC has applied it across the board to every rate in the baseline tables. This may cause a slight difference between the way DPS rates invoices and the way AMSA's 400NG software, which is available to PPSOs and GSA, may rate invoices. Both SDDC and AMSA acknowledged the problems that may cause, and seem willing to work together to eliminate any discrepancies. However, I did find this note on the SDDC webpage containing the rates interesting:

This is the sole source for DPS domestic rates to which linehaul and SIT discounts apply and SDDC does not endorse any 3rd party software or products that utilize these files to compute shipment costs. Any discrepancy between such software and these posted rates is no fault of SDDC and the attached rates provided by SDDC will be the final authority for payment.

Posting the rates on the SDDC website also allows the baseline rates to be viewed without the use of a software program, which is a change from the previous concept of an "electronic tariff". It makes the tariff more like the current program tariffs, in that the baseline rates are viewable without a computer system. However, due to the way the 400NG was designed, while it may be possible to calculate a rate without using a computer system, it will be much more difficult than it is in the current program. The 400NG is designed for rates to be calculated with computer software, and doing it without the use of software will be very complex and difficult.

From Daycos' perspective, we are actively working on loading these new rates into our system, and don't anticipate any problems being ready for shipments picking up after January 1st. We have been assured that the DPS rates will be updated as well, so if all goes according to schedule, we should have a smooth transition for our billing and AccuBill customers.