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An Analysis of International Air Freight Forwarding Support for the United States Navy

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An Analysis of International Air Freight Forwarding Support for the United States Navy Calhoun: The NPS Institutional Archive Theses and Dissertations Thesis Collection 1985 An analysis of international air freight forwarding support for the United States Navy. Lake, Robert H. Jr. http://hdl.handle.net/10945/27966 DUDLEY KNOX LIBRARY NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA 93943 NAVAL POSTGRADUATE SCHOOL Monterey, California THESIS AN ANALYSIS OF INTERNATIONAL AIR FREIGHT FORWARDING SUPPORT FOR THE UNITED STATES NAVY by Robert H. Lake, Jr. June 19 8 5. Thesis Advisor D.C. Soger Approved for public release; distribution unlimited. 1222865 UNCLASSIFIED SECURITY CLASSIFICATION OF THIS PAGE (Whan Data Entered) REPORT DOCUMENTATION READ INSTRUCTIONS PAGE BEFORE 1. REPORT NUMBER COMPLETING FORM 2. GOVT ACCESSION 3 NO - RECIPIENTS CATALOG NUMBER" « TITLE (and Subtitle) TYPE 5. OF REPORT 4 PERIOD COVERED An Analysis of International Air Freight Master's Thesis Forwarding Support For the United States Navy June 1985 6. PERFORMING ORG. REPORT NUMBER 7- AUTHORCsj 8 CONTRACT OR GRANT NUMBERC.j" Robert H. Lake, Jr. 9- PERFORMING ORGANIZATION NAME AND ADDRESS ,0 - " ' "OGRAM ELEMENT, AREA PROJECT TASK Naval Postgraduate School & WORK UNIT NUMBERS Monterey, California 93943-5100 H. CONTROLLING OFFICE NAME AND ADDRESS 12. REPORT DATE Naval Postgraduate School June Monterey, 1985 California 93943-5100 '3. NUMBER OF PAGES 104 1«. MONITORING AGENCY NAME & ADDRESSf// different from Controlling Office) 15. SECURITY CLASS, (of tht, report) Unclassified ' 5 *' DECLASSIFICATION/ DOWNGRADING o\->H fc. !_J U Lb E. 16. DISTRIBUTION STATEMENT (of this Report) Approved for public release; distribution unlimited. 17. DISTRIBUTION STATEMENT (of the abstract entered In Block 20, II different from Report) 18. SUPPLEMENTARY NOTES 19. KEY WORDS (Continue on reverse side If necessary and Identity by block numb. Air ' lng Int6rnational ' *** Freight Forwarding, Air Freight, Ai r StFreight industry,7f Burlington-Northern Air Freight, Inc., Navy Material Transportatxon Office, Defense Transportation, Military Airlift Command 20 T A C n a °" "^ " "• C ""'V «n* Identify by block number) ~ Thl M f7J M T r T"" ° ffiCe (NAVMT0) is the Airlift Authority (S for 1^°^°" Clearance SUCh iS res Ponsible for the Navy material iv ?*' " ' movement of air £t? U reviews the freight the us? bv the Af ^ ^ industry and analyzes Lw f C °mmercial international air freight shipment of material °, n forwarders in the ^P^yed units to see if there betted utm^tlon The ^ could be I^T^° r US6d Bu rlington-Northern Freiaht ine It »' o 5 International Air f indust The author's conclusion is tha^co^cialinter^tionafa"international air ?freight^ ^ by the Na^yT forwarders could be better utilized FORM DD EDITION 1 JAN 73 1473 OF 1 NOV 65 IS OBSOLETE S N 0102- LF-014-6601 Unclassified SECURITY CLASSIFICATION OF THIS PAGe (When Data Entered) Approved for public release; distribution is unlimited An Analysis of International Air Freight Forwarding Support For the United States Navy by Robert H. Lake, Jr. Lieutenant, United States Navy B.S., Towson State University, 1976 Submitted in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE IN MANAGEMENT from the NAVAL POSTGRADUATE SCHOOL June 1985 ab stract f°r *« ^e > the This ^ udy ^« „ > Navy » £, eWS f as use th " ° Wav ' such, by th * a ir fr y mat he by . o ** £ **.*, air . ^-r;e comme ;s :^\ ^ u -ie ---:;:;::- - ;;x. r --°s;:ti fr^ght 10n f the forwar " that C ° indus trvtry Warde commmmer ' " c ould ^al The be bett lntern air y the Navy. 3/S TABLE OF CONTENTS I. INTRODUCTION 8 A. GENERAL 8 B. OBJECTIVES 9 C. RESEARCH QUESTIONS 9 D. SCOPE 10 E. ASSUMPTIONS 10 F. METHODOLOGY 11 G. ORGANIZATION 11 II. HISTORICAL BACKGROUND 12 A. U.S. DOMESTIC AIR FREIGHT INDUSTRY 12 B. U.S. INTERNATIONAL AIR FREIGHT INDUSTRY ... 13 C. U.S. AIR FREIGHT FORWARDING 16 1. Regulation of Air Freight Forwarders ... 17 2. Air Freight Forwarders Today 20 D. U.S. INTERNATIONAL AIR FREIGHT FORWARDING . 20 1. Pacific Outlook 22 2. The Role of IATA in Ratemaking 23 3 Current Environment 24 III. BURLINGTON -NORTHERN AIR FREIGHT, INCORPORATED . 28 A. SELECTION PROCESS FOR A REPRESENTATIVE FORWARDER 28 B. HISTORY 29 1. National Operations 29 2. International Operations 30 IV. MILITARY POLICY ON OVERSEAS AIR SHIPMENTS .... 36 A. DEPARTMENT OF DEFENSE 3 6 B. MILITARY AIRLIFT COMMAND 3 6 4 C. UNITED STATES NAVY 38 1. Navy Overseas Air Freight Organization . 38 2. Overseas Shipments 40 3. Qualifications for Air Transportation . 41 4. Additional Criteria for Overseas Air Movement 41 5. Bills of Lading 42 6. Future Navy Projects 42 V. COMPARATIVE COSTS AND SERVICE TIMES OF NAVY INTERNATIONAL AIR FREIGHT 44 A. INTRODUCTION 44 B. SERVICE TIME ANALYSIS 44 1. UMMIPS Standards 44 2. Initial Review of Data 45 3. Methodology 46 4. MAC East Coast Total Handling Time .... 47 5. MAC West Coast Total Handling Time .... 48 6. MAC Opposite Coast Total Handling Time . 49 7. MAC APOE Handling Time 50 8. MAC Shipments and Tonnage 50 9. Burlington-Northern Delivery Times .... 51 C. COST ANALYSIS 52 D. FACTORS CONTRIBUTING TO THE LENGTH OF MAC DELIVERY TIMES 52 E. SEEKING COMPETITION FROM COMMERCIAL ACTIVITIES 53 VI. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS .... 71 A. SUMMARY 71 B. CONCLUSIONS 72 C. RECOMMENDATIONS 73 APPENDIX A: NAVY OVERSEAS AIR ROUTING ACTIVITIES .... 75 APPENDIX B: CONUS OUTBOUND SHIPMENTS FOR MAC CHANNEL AIRLIFT 77 APPENDIX C: SHIPMENTS VIA COMMERCIAL AIRLIFT 79 APPENDIX D: SHIPMENTS ORIGINATING IN OVERSEAS AREAS FOR MAC CHANNEL AIRLIFT 81 APPENDIX E: LISTING OF ALL OF THE CITIES BY STATE IN THE U.S. WITH BNAFI OFFICES 83 APPENDIX F: LISTING BY COUNTRY AND CITY OF BNIAFI INTERNATIONAL STATIONS 88 APPENDIX G: SERVICE AGREEMENT BETWEEN NAVY MATERIAL TRANSPORTATION OFFICE AND BURLINGTON -NORTHERN AIR FREIGHT 93 LIST OF REFERENCES 99 BIBLIOGRAPHY 102 INITIAL DISTRIBUTION LIST 104 „ ' The Int e II III ' • 26 IV ' • 33 V nt • VI • " naI • . —^ ' • A ir ^andards Gro 34 - Pro 11 ^J^inai ^ ••.... • • ^n tifier • 35 ^c„nanan;7 er Vttt dli n a- T . Codes p., • • ij g E . " ^ as t ' ^(rp., Coast • 55 ;; ^ a " • 57 "" TP X)( EaSt *> , «^lj Has ! ast) rr/lme ^ • Ai ^ T C° a 58 * Term-ieri P-2)rp * st)j '(From ' • XT *unal r^ e***.3 . C° a • 59 M4C *-««.* ' • ^) . XIX """-ling Codes J . • 60 ' c 1 *- est • 61 s? Hand ^i 1 '^ c°a-> MACHanm-r Sr/me ^P-2)rp s croa st 62 ) lme -t ^ C (from Co ^t) 63 Handle! ! o*„ * . 64 65 C° PerC - aSt) - • • • ^ages • • -XXXVli M (Pro(Pr 66 * • »We. ^ Handline ••-... t - me ' c • °astsl Percenf • . 67 s- *<»-,»_, • "" °— C° h6rn -' St * ' Con ^liveryry ' • . Parispari , °n TimesT of . 68 an . Shj-Pment 69 70 . I. INTRODUCTION A. GENERAL In 1949 the Civil Aeronautics Board (CAB) granted the necessary exemptions enabling U.S. commercial companies to act as overseas and foreign indirect air carriers . In 1948 the Military Air Transport Service (MATS) was formed consol- idating the long-range airlift capability of the Air Force and Navy for the purpose of transporting m- .itary passengers and freight on scheduler: flights. In 1966 MATS became the Military Airlift Command (MAC). The Navy Material Transportation Office (NAVMTO) is the Airlift Clearance Authority (ACA) for the Navy and, as such, is responsible for the movement of Navy material by air. Burlington-Northern International Air Freight, Inc. (BNIAFI) holds the Navy contract for consolidation of contractor high priority freight that is destined for overseas and deployed units. They are only secondarily utilized as a forwarder. Current Department of Defense (E D) policy calls for all Navy material over 150 pounds destin d for overseas movement to meet priority, required delivery date (RDD) , and weight requirements, as well as to be given clearance authority by NAVMTO prior to forwarding by air. Only when NAVMTO deter- mines that MAC can not meet the RDD requirement based on Uniform Material Movement and Issue Priority System (UMMIPS) time standards is the freight given authority to be forwarded by commercial means The intent of this thesis is to look at the interna- tional air freight forwarding support for the Navy and determine how it is being utilized. Any alternatives to the current Navy policy for international air f >ight forwarding must ensure that no visibility or traceability is lost in the freight movement. B. OBJECTIVES The objectives of this thesis are to determine how the Navy is utilizing international air freight forwarder support and if there is the possibility that it could be more effectively utilized. C. RESEARCH QUESTIONS Given the aforementioned objectives, the following primary research question was postulated: How is the Navy utilizing the international air freight forwarder to support its overseas and deployed units? The following secondary questions were considered perti- nent in addressing this research question. 1. What is DOD and Navy policy concerning the movement of high priority freight to overseas and deployed units? 2. How does this policy affect Burlington-Northern's ability to function as an international air freight forwarder for the Navy? 3. Could the Navy better utilize international air freight forwarders? 4. What is the future of international air freight forwarding support for the Navy given present regula- tions? 5. What does Burlington-Northern do effectively that could be of increasing benefit to the Navy in the movement of high priority freight overseas? . 6. How effective is MAC at delivering air freight within the UMMIPS time standards? D. SCOPE The scope of this study will be limited to high priority contractor freight destined for overseas and deployed Navy units. This high priority freight consists of contractor freight, which is material that has been contractually spec- ified for delivery to Burlington-Northern for onward move- ment to its ultimate destination and possibly other freight as designated by NAVMTO .
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