PPF Covers Many Topics

Earlier this month, SDDC held the Personal Property Forum (PPF) in O’Fallon, Illinois to discuss items of interest to TSPs and the Military Services. The format was similar to the last PPF held in that there was an effort to keep the focus on larger, more general issues, instead of specific day-to-day issue. Below is a highlight of some of the topics discussed, although not a comprehensive review of every topic covered.

Profitability of HHG Industry: Mike Williams, Deputy to the Commander of SDDC, opened the meeting with a discussion that focused on the HHG industry’s economic health. Mr. Williams stated that a robust HHG industry is essential to the Department of Defense in order to maintain the necessary capacity to handle military personnel moves. He discussed some other DOD programs that guarantee a certain amount of business to providers to ensure the capacity is available when it is needed , but stated it is harder to apply those models to the HHG industry because of the number of TSPs.

TSP Qualifications: With rate filing tentatively scheduled for February 2011, SDDC did discuss TSP qualifications. Lt. Col. Derek Oliver stated that SDDC is doing a full review of “how we define a qualified TSP.” He spoke of their efforts to ensure that the CFAC rules are consistent, and described the current structure as “sub-optimal.”

Minimum Number of Surveys: SDDC attempted to reach an industry consensus on whether they should institute a minimum number of surveys completed in order to be statistically valid. The goal would be to prevent a TSP from getting one shipment with a SCAC, handling it very carefully, ensuring the survey is completed, and then blacking out the rest of the year to protect their high score for the following cycle. While there was a lot of support for minimums to prevent this practice, there were differing opinions presented and no clear consensus was reached.

Signed Agent Agreements: John Johnson stated that SDDC is considering a requirement for TSPs to obtain signed agreements with agents in channels in which the TSP wishes to file a rate. The agreement would not limit the agent to only working with certain TSPs, nor would it  be a guarantee that the agent would service that TSP’s shipments. Its goal would be to ensure that TSPs were not filing rates in areas where they had no agent capacity. John Johnson stated they were considering having the TSP hold the agreements on file, and just performing spot checks for enforcement. The TSPs in attendance offered some opposition to this proposal, stating that it would be a large administrative burden and it would not really accomplish what SDDC intends.

DPS Distribution Model Changes: Lt. Col. Oliver stated that SDDC was considering changes to the DPS shipment distribution model, specifically a change from 5,3,2,1 in the cascading quality bands to something like 3,2,1,1. TSPs in the room suggested that a 2,2,1,1 or a 1,1,1,1 model also be considered, as well as reducing the number of yearly performance periods.  SDDC did state that time was running short to make a change prior to the next rate filing, and encouraged industry to reach a consensus on the preferred distribution model soon.

Increase Blackout Granularity: It was mentioned a couple of times that SDDC would attempt to change the DPS blackout system to allow blackouts at the PPPO or zip code level, but that there would be some challenges to getting this done prior to the next peak season.

Outsourcing of Personal Property: Unlike the SDDC Pacific meeting, Mike Williams did not discuss the possibility of outsourcing the personal property program, but it still was a topic of discussion. During a discussion of peak season issues, a Military service representative stated that he believed that if we had the same peak season failures in 2011 as we had this past year, the possibility of outsourcing would be increased. Both Lt. Col. Oliver and a representative from the Office of Secretary of Defense (OSD) both spoke to that comment, and downplayed the possibility of outsourcing. The OSD representative stated “there was absolutely no plan” for outsourcing the program to a third party logistics company.

Related Posts

1. SDDC, JPMO-HHGS Give Updates at NDTA - September 27th, 2010
2. SDDC Announces “Program Efficiency Review” - March 10th, 2011
3. SDDC Offers Update on Program Efficiency Review , Seeks Industry Feedback - April 11th, 2011