Frustration ahead? Another subcontractor parts ways with military car shipper

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International Auto Logistics opened new vehicle processing centers like this one in Mildenhall, England, when it took over the contract in May to ship servicemembers? vehicles.  Adam L. Mathis/Stars and Stripes
International Auto Logistics opened new vehicle processing centers like this one in Mildenhall, England, when it took over the contract in May to ship servicemembers? vehicles. Adam L. Mathis/Stars and Stripes

Frustration ahead? Another subcontractor parts ways with military car shipper

by: Mike Fitzgerald | .
Belleville News-Democrat (TNS) | .
published: January 26, 2015

For the second time in a month, a key subcontractor for the company that ships military members’ cars overseas has parted ways with the firm because of a payment dispute.

The upshot of North Carolina-based Fayetteville Vehicle Processing Center & Storage ending its ties with International Auto Logistics — which in late 2013, was awarded a $1 billion contract — could mean even longer delays for IAL’s already frustrated military customers around the nation.

Fayetteville Vehicle Processing Center, or VPC, which specializes in the storage of privately owned vehicles, was one of the original 10 subcontractors that International Auto Logistics had listed in its bid to win the contract from the U.S. Transportation Command, which is based at Scott Air Force Base.

IAL, of Brunswick, Ga., parted ways with Fayetteville VPC because the latter had complained about $4.2 million in unpaid bills owed by IAL for the storage of thousands of cars, according to Terry Johnson, owner of Fayetteville VPC.

“They are basing their termination on slow pay for the employees, slow pay for the vendors,” Johnson said, adding that his firm’s failure to pay its employees and vendors was a direct result of IAL’s non-payment for services provided.

Amanda Nunez, an IAL spokeswoman, declined to comment for this story.

“Both parties are subject to a mutual non-disclosure agreement, therefore we cannot comment further,” according to a statement Nunez issued to the News-Democrat.

In late December, another of IAL’s top subcontractors announced it was terminating its relationship with IAL by early 2015 because of IAL’s performance and payment problems, including the alleged non-payment of $20 million in fees.

Liberty Global Logistics LLC, of Lake Success, N.Y., which coordinates ocean cargo ships, exercised its termination rights with IAL “due to the prime contractor’s failure to cure contract defaults,” according to Robert G. Wellner, Liberty’s executive vice president.

Gen. Paul Selva, the commander of Transcom, which oversees the IAL contract, declined to comment on Friday about IAL’s latest pay dispute with a contractor.

Nor would Selva discuss the Feb. 1 deadline he had set for IAL to present a plan for avoiding the delays and glitches that plagued the company when it took over the car shipment contract on May 1, the start of the peak vehicle shipping season.

Navy Cmdr. David Nunnally, a Transcom spokesman, issued a statement Friday stating that the command has “every confidence IAL will submit their 2015 plan before the Feb. 1 deadline as U.S. Transcom has requested.”

Service members’ complaints about late deliveries and damaged vehicles have been pouring into Transcom since IAL took over the contract. The complaints have continued despite measures taken to deal with the firm’s problems, including the creation of a 12-member “fusion team” of logistics and supply chain experts to pinpoint and untangle the problems behind IAL’s vehicle delivery delays.

Selva announced in late August that he had directed site survey teams to visit vehicle processing centers around the globe to look for missing cars entrusted to IAL.

Transcom reported four weeks later that the on-time delivery of military member’ privately owned cars had improved dramatically. Nonetheless, many military members continued to complain, especially those who had entrusted their cars to IAL before Aug. 1 and were still waiting to see them two months later.

In mid-December, the Department of Defense Inspector General’s office announced it would be sending an audit team to Scott by the end of that month to look at performance complaints concerning IAL.

The Defense Department audit team will be looking at the U.S. Transcom’s Global Privately Owned Vehicle Contract III, under whose auspices the command awarded a nearly $1 billion vehicle-shipping contract to IAL. In addition, the auditors will look at multiple vehicle processing centers, according to a project announcement letter issued by Michael J. Roark, the department’s assistant inspector general.

But IAL’s many upset and impatient customers, who have vented their complaints on a Facebook page that has evolved into a conduit for their anger and concerns, remain skeptical that Transcom will deal adequately with IAL.

The Facebook page has nearly 4,500 members and nearly 2,100 signatures to an online petition calling for Transcom to revoke its contract with IAL.

As of mid-December, U.S. Transcom’s Inspector General has received and resolved 1,444 complaints regarding IAL’s service from active duty military personnel and civilian Defense Department employees, Transcom figures show.

mfitzgerald@bnd.com

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