Menlo Worldwide Logistics and DTCI

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Carrier Procurement Process

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Posted by MenloEditor

As a non-asst based 3PL Menlo relies on its relationships with over 300 subcontracted carriers (Transportation Service Providers or TSPs) to execute the shipment transactions within the scope of the DTCI contract.

Carrier Procurement Process Overview:

 

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Carrier Identification:

Menlo identifies prospective TSPs via a number of methods.  These methods include:

  • In person carrier outreach efforts at various defense / industry events
  • Incumbent TSPs at any given site by reviewing historical shipment data prior to go-live at that site
  • Offering opportunities to current DTCI program incumbent TSPs for upcoming sites
  • Carrier expressed interest as a result of the carrier submitting some basic information on Menlo’s Carrier Registration Form at the following link

Carrier Bidding:

Once the candidate TSP list is developed Menlo launches lane based bids for capacity to the carrier community.  Bids are segregated by mode and equipment type; however, carriers respond to multiple bid packages (as example, TL dry van and flat bed) dependent upon their capabilities.  Bids are phased by site implementation date so that rates and capacity are bid and committed in reasonable proximity to the site’s go-live date.  Additionally, Menlo may issue supplemental bids for sites already live in the event that growing volumes require additional capacity, new lanes develop, or incumbent carriers are not meeting performance requirements.

Each bid is conducted with web-based tools that allow carriers to review lanes, volumes, and any site unique requirements.  Menlo notifies the carriers of the upcoming bid(s) via email that further explains access to Menlo’s web site.  Many of the rate and lane files are available for download so that TSPs may analyze the data with their own tools.  The carrier then submits rates for the lanes of interest via data entry into Menlo’s web site or upload of larger response matrices into the same web site.

Carrier Selection:

Menlo selects the TSPs based upon the TSP’s capability to demonstrate a compelling value proposition for inclusion in the DTCI program.  Selection criteria include the below listed elements:

  • Capacity
  • Financial health
  • Operational soundness
  • Rates
  • Service history (incumbency counts)
  • Site-specific requirements
  • Small business certification
  • Technical capability

Carriers must also execute several contracting documents with Menlo prior to the first shipment being tendered to that carrier.  Those documents are cited below:

  • Master Agreement
  • Schedule of Services Agreement
  • Rate Addenda
  • Fuel Surcharge Agreement
  • Accessorial Agreement

Of particular note is that the Master Agreement includes several FAR clauses.  Since the DTCI contract is FAR based, the FAR mandates that certain clauses must flow down to the subcontractors.  Accordingly, these items within the Master Agreement are non-negotiable.

Performance Requirements

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Posted by MenloEditor

Performance Requirements:

The current DTCI PWS requires Menlo to perform to the below listed KPIs:

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Menlo holds these same performance requirements of its TSPs for those elements that a TSP influences.  Specifically, those items are on-time pick up, on-time delivery, shortage and damage ratio, and claims processing.  While Small Business Spend is not controlled by the TSP, it does have a strong influence on the TSPs Menlo selects to participate within the network.

Performance Management:

On-Time Pick Up and On-Time Delivery are managed on a daily basis as Menlo requests shipment status updates from the TSPs.  Any transaction that falls outside of tolerance is mutually researched with the TSP to identify root cause in an effort to reduce future occurrences.  Additionally, this research effort may provide substantiation for an exception granted to that transaction for allowable reasons (i.e. weather delays, unscheduled consignee closures, etc.).

Menlo’s Load Planners work directly with the carrier base daily to accomplish the research.  The results of that work are shared with the TSPs on a weekly basis via a Menlo published carrier scorecard. 

Over time trends develop for TSPs successes or challenges in any segment of the network.  With success a carrier receives the opportunity to grow within the network.  Menlo works jointly with the carrier on any challenged area in order to improve performance.  Unfortunately, some of any given carrier’s challenges cannot be resolved.  In those instances Menlo may cease using a carrier in favor of one that can perform.  However, removal of a carrier is targeted for those lanes / services that are failing.

 

Order Lifecycle

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The DTCI scope requires Menlo to manage orders from receipt of shipment request from the Government through to payment for services to the TSPs.  On any given day Menlo receives in excess of 1,700 shipment requests from Transportation Officers and their staffs across the 48 contiguous United States.  These requests are sent to Menlo via an EDI219 transaction from three Government shipper systems (DSS, GFM, and CMOS).  The EDI219 contains all of the relevant information required to transport the cargo.

Once Menlo receives the EDI219 it must optimize the offer to include mode and carrier selection.  Shipments are booked with carriers via on-line tendering within the ONE TMS or via phone.  Once the shipment has been planned and booked with a TSP Menlo then notifies the Government of the routing instructions via an EDI220 transaction back to the originating shipper system of the EDI219.  The current DTCI PWS requires this process to take no more than four hours from Menlo’s receipt of the EDI219.  Furthermore, shipments are required to pick up from origin within eight operational hours from receipt of the EDI219 unless otherwise arranged with the origin site (i.e. dedicated lanes or loads requiring crane service).

Menlo manages the transaction through to delivery with the underlying TSP by requiring pick up and delivery statues from the TSP.  These shipment statuses may be sent into the ONE TMS via an EDI214 transaction or keyed into the ONE TMS via a web portal.  Of particular note, Menlo will not seed PowerTrack with an expected payable to the carrier until such time as Menlo has received a delivery status from the carrier within the ONE TMS.

 

Life of an Order Overview:

orderlifecyle.png

Frequently Asked Questions

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Posted by MenloEditor
  • Does Menlo margin the freight to make its money?
    • No, all purchased transportation is passed thru to USG with no margin nor uplift.  In other words, the Government pays Menlo no more than it pays the carrier for any given shipment.
  • Does a TSP need to acquire any special bonds to perform this business?
    • No, none other than what is required by state / federal law to be in business
  • What type of insurance does Menlo required?
    • Cargo = $150k
    • Commercial Auto = $1MM
    • Worker’s Comp = $250k (or as otherwise required by law)
    • CGL = $1MM
  • Must a TSP be registered with SDDC to perform under DTCI?
    • No, all contracting and carrier selection is performed by Menlo
  • Do TSP personnel (including drivers) need security clearances?
    • No, materials requiring clearances (i.e. AA&E) are not within the DTCI scope
  • Does DTCI require each driver to have a TWIC?
    • Not as a pervasive rule; however, some DoD port locations are beginning to move to this requirement (i.e. Jacksonville, FL)
  • Does DTCI require the TSP to utilize E-Verify?
    • No, this contract was awarded before 8 Sep, 2009.  E-Verify only applies to contracts awarded after 8 Sep, 2009 per FAR 101.8(d)
  • Does Menlo require the TSPs to participate in RAPIDGate?
    • No, RAPIDGate is a program that is discretionarily engaged at any DoD shipper site.  Furthermore, RAPIDGate is a voluntary program for TSPs wishing to access any site that has implemented the program.  Access to the site is still allowed through separate, parallel procedures at the site.

 

How do I obtain a SCAC code?

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Posted by MenloEditor

The SCAC code is a requirement to haul freight under DTCI because this is how businesses are identified and tied within the One Network transportation management system, the Powertrak payment system and the Menlo master carrier list.

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