Ikeda The U.S. Department of Defense (DOD) has been struggling to transport its troops’ privately owned vehicles (POV) for some time now, dealing with major delays, late payments to car shipping companies, and hundreds of angry civilians who have been left without their family vehicles. And this situation isn’t likely to improve, as yet another subcontractor is threatening to discontinue its car transport services for the U.S. military.
Mazouna Liberty Global Logistics, located in Lake Success, N.Y., is a shipping subcontractor to Georgia-based shipping service International Auto Logistics. This past May, International won a contract with the DOD wherein they provided shipping services for personal cars of DOD employees and of Americans serving in the military.
The service is focused on transporting civilian cars to and from England — a costly trans-Atlantic endeavor for International, when simply driving across the U.S. would cost over $2,000 in gas alone — but a very necessary process, nevertheless, for servicemen, servicewomen, and DOD civilian employees who are required to transfer their duty stations.
It appears that Liberty is quickly losing faith in International’s shipping services, noting that the Georgia transport company has been having problems paying its fees to Liberty on time. International had reportedly taken out a line of credit worth $8 million in 2013, and that line expired this past July. Now, Liberty claims that the company has accrued nearly $3 million in late payments, while officials at International claim that Liberty’s invoices are incorrect and that $5 million was paid to the N.Y. contracting company when it first told International that it wanted to end the DOD contract.
These late fees are perhaps indicative of a larger problem that International is dealing with: the shipping service has received numerous complaints that it has failed to deliver cars on time, and although it’s unknown how much these late deliveries have cost the company, the U.S. Transportation Commend (TRANSCOM) has stated that International is required to pay any expenses that result from late deliveries (such as individual rental cars for people to use as they wait for their own cars to be delivered). It’s very likely that the extra fees caused by late deliveries are impacting International’s financial stability even more, and that late payments to Liberty will only continue if International keeps falling short of its promised delivery dates.
With both the U.S. TRANSCOM and the Liberty subcontracting service expressing interests to terminate International’s shipping contract, it seems very possible that the DOD won’t be shipping its employees’ cars through International for much longer — but if this is the case, then the DOD will have to make some last-minute agreements in order to ensure that employee vehicles aren’t held up indefinitely.