Service members and their families are the driving reason behind a $7.2 billion contract that will fundamentally change the process for moving household goods, officials say.
The contract, aimed at fixing military families’ long-standing problems with damaged household goods, and other frustrations with movers, puts management of the moving process in the hands of a consortium of private companies.
Beginning with domestic shipments in February 2021, a single commercial move manager will oversee everything related to the movement and temporary storage of household goods, essentially privatizing a function currently conducted by U.S. Transportation Command.
Defense officials announced the contract was awarded to American Roll On Roll Off Carrier Group, of Parsippany, New Jersey, for managing the moves of service members, DoD civilians, and the Coast Guard. Known as ARC, they lead a team of other companies who will be subcontractors, dubbed Team ARC, that have also been in the defense industry for a collective 75 years and are well-known national names in the moving industry. The $7.2 billion covers a nine-month transition and three-year base period.
Household goods moves this year will continue under the current Defense Personal Property Program, which is managed by the U.S. Transportation Command.
Among other things, the new process will give DoD — and service members — better access to quality movers to meet peak demand for moves, and help DoD fix the problems of lack of accountability and responsibility in the current process, TRANSCOM officials said. It will also improve communications between service members and their movers throughout the move.
A nine-month transition period has begun, officials said, and the first move under the new contract is planned for February 2021. At that time, Team ARC will handle all the shipments in the continental U.S. during the 2021 peak season, which generally runs from May through August. By the 2022 peak season, the company will be expected to manage all international moves, as well as the domestic moves — a total of about 400,000 moves each year.
“DoD families are our North Star and the reason we are making this change to the Defense Personal Property Program,” said U.S. Army Gen. Stephen Lyons, commander of TRANSCOM, in an announcement. “The contract was written by and for the military services, and addresses a long-standing pain point DoD families have highlighted for years.”
This move puts TRANSCOM on the right path, said Air Force Chief Master Sgt. Jason L. France, TRANSCOM’s senior enlisted leader. “I fully understand the stresses and frustration associated with military moves,” said France, who has moved 15 times in his 30-year career, nine of which were with family.
He said service members and family members shared their experiences and recommendations with TRANSCOM officials, as well as leaders across DoD, in the effort to craft a proposal which led to the contract.
There were seven competing proposals for the contract.
ARC is part of the Norwegian company Wallenius Wilhelmsen, and operates the largest U.S.-flag fleet of roll-on, roll-off vessels.
ARC is the lead in the contract. The Team ARC consortium includes UniGroup, a $1.7 billion transportation company and the parent of United Van Lines, and Mayflower Transit; Suddath, a company that moves about 30,000 military members a year; Atlas World Group, the parent company of Atlas Van Lines, Inc. and Atlas World Group International; The Pasha Group, which has moved military members since 1947; and Deloitte.
While DoD is handing over the management to a private consortium, they’re not washing their hands of the program. “To be clear, the DoD will never relinquish responsibility for household goods shipments,” Lyons said, in the announcement.
For decades, military families have complained about damaged and lost belongings during household goods moves, and the quality of service that some moving companies have provided. Families were vocal in the peak season of 2018, when shortages of moving trucks, drivers and packers further exacerbated problems. There were problems with delayed pickups and deliveries, and reports of damage to belongings.
The trucks and crews that are the critical part of the program are all owned by private companies, many of which are small businesses and will continue with the program.
The new contract will provide a centralized system to manage the capacity — such as trucks and crews — that TRANSCOM can’t do with the current system, said Ken Brennan, director of acquisition for TRANSCOM, in a Wednesday briefing with reporters. Instead of awarding the contracts through dozens of offices on the basis of each individual shipment, the company will be able to use the available trucks and crews in more efficient ways, officials said.
For example, one source said, the system now simply awards a shipment to a certain location, such as from Norfolk to San Diego. The company arranges for a crew to pack and load the items, and for a truck to get the belongings to San Diego. But under the new system, planners would also consider the most efficient use of trucks and crews in determining which truck goes to that sailor’s house in Norfolk. They’d also consider whether the truck might be able to pick up belongings of another service member — or another customer in the private sector —in the San Diego region, for delivery on its way back to the East Coast.
DoD already relies on the moving industry to move service members’ household goods. But there’s no enduring contract, and no enduring relationship with any of the numerous moving companies that handle household goods, according to Brennan. This long-term relationship provides industry with the confidence and rationale to invest in trucks and crews, and to use their relationships within their own networks to increase capacity to meet DoD’s demand, he said.
And because there was no formal contract with household goods movers, DoD “couldn’t hold them accountable in a meaningful way,” Brennan said.
That has been a big concern among some military families, who have long asked for DoD to hold moving companies accountable for their lost and damaged property.