Revision of MTMC Freight Traffic Rules Publication No. 4A, Item 255 and MTMC Guaranteed Traffic Rules Publication No. 50, Item 715, Both Entitled “Computation of Freight Charges”

AGENCY:

Military Traffic Management Command, DOD.

ACTION:

Notice.

SUMMARY:

The Military Traffic Management Command (MTMC), as the Department of Defense (DOD) Traffic Manager for surface and surface intermodal traffic management services (DTR vol. 1, pg. 101-113), hereby modifies the text of the existing rule, entitled “Computation of Freight Charges,” in MFTRP No. 4A, Item 255 and MGTRP No. 50, Item 715. The purpose of this modification is to change the basis of freight charge computation for bulk petroleum tank truck shipments from gross volume to a different methodology (sometimes referred to as “net” volume) in order to better conform to what has become an accepted industry practice as well as to comply with procedures and automated systems used by or being implemented by the Defense Energy Support Center.

DATES:

This change is effective May 1, 2000.

ADDRESSES:

Point of Contact: Headquarters, Military Traffic Management Command, ATTN: MTOP-JF, Room 608, 5611 Columbia Pike, Falls Church, VA 22041-5050, fax: 703-681-9871 attn: Jerome Colton, e-mail: coltonj@mtmc.army.mil.

FOR FURTHER INFORMATION CONTACT:

For additional information contact Mr. Jerome Colton, MTMC at (703) 681-1417 or Mr. Keith Pladson, DESC at (703) 767-8381.

SUPPLEMENTARY INFORMATION:

A notice proposing this change was published in the Federal Register, vol. 64, no. 204, page 57075, Tuesday, October 22, 1999. In response to this notice, a total of one (1) comment was received. The synopsis of the comment and response are as follows:

Comment: The phrase “to conform to standard industry practice” is not understood. Standard industry practice is to charge the gross gallons amount. Why should we change this to net gallons just for government locations? For at least 27 years gross gallon charges have been in effect. Changing is a waste of time and money.

Response: 1. DOD has researched the loading points served by the commenter. All locations use temperature compensating meters so all can—and do—provide net volumes.

2. While gross gallons was indeed the industry standard in the past, this standard has been changing in favor of net gallons. As temperature-compensating meters are now in common use, using net gallons is (a) easily determined; (b) the measurement of choice as volume fluctuations due to temperature are eliminated; and (c) used by the majority of transportation modes. DOD has therefore chosen net gallons to be the standard for its new automated system, which covers the transportation of bulk fuel by all modes. In those few instances or locations where temperature-compensating meters are unavailable, conversion tables can be used.

3. All discussions held with carriers both prior to and after the previous Federal Register notice proposing this change contradict the commenter's assertions. These discussions indicated, without exception, that carriers either welcome or have no difficulty with this change. The fact that there was only one negative comment reinforces this conclusion.

4. Carriers are free to file rate changes if they believe the change will adversely affect their revenue.

(End of Response)

It is therefore determined that this proposed change should be implemented, effective May 1, 2000. As this change may affect the revenue that bulk petroleum tank truck carriers receive for movements of DOD bulk petroleum shipments, carriers providing such services to DOD may wish to review their existing tenders to see if any further action on their part is in their interests. Effective May 1, 2000, paragraph 1 of the relevant item in the two rules publications (MFTRP No. 4A, Item 255 and MGTRP No. 50, Item 715) will read as follows: “Except as provided in paragraph 2, freight charges in DOD tenders governed by this publication will be the greater of:

a. The amount computed by multiplying the carrier's rate by the minimum gallonage stated in the carrier's applicable tender, or

b. The amount computed by multiplying the carrier's rate by the temperature-corrected gallonage placed in the vehicle at the time of loading. Temperature-corrected gallonage is defined as the volume correction to gallons at 60 degrees Fahrenheit (sometimes referred to as “net volume”) and will be determined by the loading facility through either the use of temperature-compensating meters or by manual conversion in accordance with the appropriate tables in the most recent edition of the API Manual of Petroleum Measurement Standards (MPMS).''

(end of change)

In general, changes to a rules publication (including this change) will no longer be accompanied by a mass mailing to carriers and other interested parties of the page containing the change. Instead, the rules publication will be updated on the MTMC website (www.mtmc.army.mil) to incorporate changes. From the MTMC website, click in succession on: Transportation Services, Freight Logistics, Freight Traffic Rules Publications, and then select the Rules Publication of your choice.

Regulatory Flexibility Act: This change is not considered rule making within the meaning of the Regulatory Flexibility Act, 5 U.S.C 601-612 .

Paperwork Reduction Act: The Paperwork Reduction Act, 44 U.S.C 3051 et seq., does not apply because no information collection requirement or recordskeeping responsibilities are imposed on offerors, contractors, or members of the public.