For owner-operators, there are three basic avenues to hauling freight for the U.S. military. The first two are the simplest:
Lease to a carrier already doing business with the military. Many major owner-operator-heavy carriers – Landstar, Mercer and others – as well as smaller entities have long been among the Pentagon’s stable for general freight (FAK) and arms, ammunition and explosives (AA&E).
Work through an approved broker. Many brokerages across the nation also are on the list of transportation service providers for FAK approved by the Surface Deployment and Distribution Command.
Become an approved FAK carrier. Small fleets and owner-operators with their own authority looking to move military freight without using brokers have two options for getting approved as an FAK carrier:
SDDC’s carrier registration program | The approval process for carriers wishing to haul FAK for the military via this long-established program follows clear guidelines; open season for new carrier registration takes place annually between Sept. 1 and Nov. 30:
1) Obtain a Standard Carrier Alpha Code from the National Motor Freight Traffic Association, nmfta.org, 703-838-1831. You will need both U.S. DOT and MC numbers, a valid credit card and an email address for filing online. Fee: $68. A paper application is an alternative; the fee is $78.
THE CSA HURDLE | Carriers looking to haul military freight must have Compliance, Safety, Accountability percentile rankings below Federal Motor Carrier Safety Administration intervention thresholds in every category in order to be approved. Staying in the program is contingent on maintaining those scores.
Carriers hauling AA&E and other security-sensitive freight must maintain the lower percentile rankings that are FMCSA’s intervention thresholds for hazmat carriers.
2) Set up an account for electronic payments with U.S. Bank Freight Payments, powered by Syncada (formerly the PowerTrack program). U.S. Bank’s long-term contract with the Department of Defense for all freight transactions was extended in January 2013 – U.S. Bank takes a small percentage of every transaction, and a nominal setup fee is levied. Visit usbpayment.com’s “Transportation” section or use the following direct contacts: firstname.lastname@example.org, 866-274-5898.
3) Complete SDDC’s online registration via the section on sddc.army.mil/GCD. The registration starts with your newly acquired SCAC. Make sure pop-up blockers are off throughout the process. SDDC notes that carriers should select “GFM ITV to GTN” in the field for Electronic Data Interchange for tracing/tracking shipments.
4) Obtain performance bond. The required amount depends on carrier size and number of states where you’ll run government freight. Owner-operators and small fleets should register with the Small Business Administration, which enables access to the small-business bonding rules. Your bond will be $25,000 to run in up to three states, $50,000 for four to 10, and $100,000 for 11 or more. Larger operations are required to maintain $25,000 for a single state, $50,000 for two or three states, and $100,000 for four or more. Costs will be as low as 1 percent to 3 percent of the bond amount annually for those with stellar credit, but they can run as high as 10 percent for others.
5) Instruct your bonding company to forward bond information by email only to email@example.com. Subject line: Company Name and SCAC. Body: Provide the bond number, amount and effective date (and expiration date if the bond is not continuous), surety company name, agent’s name, address and phone.
6) If you’re not already carrying it, obtain at least $150,000 of cargo insurance (or for bulk fuel carriers, $25,000 worth). As with the bond, instruct the insurance company to submit the certificate of insurance to the email address in step 5.
Parallel subcontracting program with Menlo Worldwide | The Defense Transportation Coordination Initiative started in 2007 with the goal of outsourcing management of a large majority of DOD freight to save costs to the U.S. government. DTCI contract holder Menlo Worldwide essentially functions as the shipper on roughly 44 percent of all domestic FAK shipments of 150 pounds or greater, says SDDC’s Mitch Chandran.
Menlo requires subcontracting carriers to have a SCAC. Andy Dyer, Menlo vice president, says the company does not require “specific performance bonds,” but insurance is required where applicable:
**Primary liability: $1 million
**Worker’s comp: $250,000 (or as otherwise required by law)
**Commercial general liability: $1 million
The path to arms, ammunition and explosives | As in general military freight, owner-operators who are part of a team operation can get into AA&E hauling without registering as a carrier by leasing to a carrier approved for AA&E. The drivers have to pass a Defense Security Service background check.
For independent owner-operators or small fleets to become AA&E-approved carriers, they must:
**Complete an incident-free year as an approved carrier in general military freight.
**Use team drivers cleared by DSS on all AA&E loads.
**Carry $5 million in liability insurance.
**Run trucks with satellite-based tracking equipment. Rules for such equipment, including panic buttons for each driver, are spelled out in SDDC’s Military Freight Traffic Unified Rules Publication-1.