Defense Transportation

The Pentagon is not realizing the estimated savings from sending vendor shipments through the Defense Logistics Agency's (DLA) regional freight consolidation centers because many vendors are not passing the savings on to DLA and because freight volume has been lower than expected. In addition, the Defense Department (DOD) did not consider a more economical alternative that GAO believes could have reduced DOD's transportation costs by more than 40 percent by using existing government freight rates and by sending the shipments from the vendors directly to the storage depots. Overall, the centers are close to delivering shipments to depots within the required time, but three percent of the vendors GAO surveyed cited many problems with lost, damaged, or mishandled freight.

GAO found that: (1) DLA has not realized the projected cost savings from sending vendor shipments through RFCC because many vendors fail to pass the savings on to DLA, freight volume has been lower than expected, and DLA has not considered more economical alternatives; (2) DLA could save nearly 44 percent in transportation costs by utilizing existing government freight rates and sending shipments directly from vendors to the storage depots; (3) although RFCC have a 90-percent success rate in meeting delivery time requirements, 3 percent of the vendors have cited problems with lost, damaged, and mishandled freight; and (4) DLA could not maintain accountability over its freight in transit due to inaccurate and unreliable information on the extent of intransit losses and the numerous carriers involved.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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