Steve Jordan interviews Mike Brannigan, CEO of Suddath in the USA, one of the companies forming the ARC consortium that has won the US military household goods moving contract.
It all began in the summer of 2018 when social media complaints about US military household goods moving erupted across the industry, citing delays, lost and broken items, and poor communication exacerbated by a trucking shortage and other operational factors. It was a problem that affected the whole industry and caught the attention of Congressional leaders.
The reaction was for Senators to challenge the US Transportation Command (USTRANSCOM): it came to the conclusion that rather than handle the contract itself through a multitude of suppliers, the military members would be better serviced if the entire contract, that would see as many as 12,000 moves a day performed worldwide in peak times, were handled by a single company. And so began the tender process for the world’s biggest household goods moving contract.
The contract was awarded to the American Roll-On Roll-Off Carrier Group, Inc (ARC) in May. For the transition period and the first three years it’s valued at $7.2 billion. Last month in The Mover we published the announcement but, for me, it left many questions unanswered. Mike Brannigan is the CEO of Suddath. He kindly agreed to talk to me to expand on some of the details and explain in what way the new structure would be better able to serve US military personnel. He did point out though that the contract is currently going through its protest period, in which the companies that were unsuccessful can challenge the decision. He could not be fully open in his responses until that was resolved, which could take some time.
Improving quality through technology
Mike explained that the old programme had run its course and he felt that the new arrangement would really drive improvements to the benefit of the military personnel. “There is now one consortium responsible for the customer experience,” he said. “It should improve the customer service and the transparency for the service member which is our ‘North Star’. It’s going to be a win over time for our service members who deserve a better experience.”
But I wondered exactly how those improvements were going to be made. After all, the companies on the ground, those actually doing the work, are likely to be largely the same. “Currently this business is executed through Transportation Service Providers (TSPs), each with its own way of working,” Mike explained. “But by going through a single source move manager we're all going to be working through a common technology platform that we call Homefront.”
Mike explained that every service member, whether they are moving domestically or internationally, will work through Homefront. It will be available through a web portal and an App and have a commercial feel. “It'll give better visibility, better transparency, and easier communication using phone, email, text, chat and push notifications about shipments. It will be a lot easier to plan and manage when every service member is working through the Homefront platform. That’s the key to it.”
Which seemed reasonable to me. If all the TSPs around the world are working through the same system, there will be greater adherence to common standards and correspondingly less variability in the service quality. “The changes might take some time to work through,” said Mike, “but I think the combination of the upfront customer experience and working with one consortium to drive accountability all the way through, will help raise the quality standards.”
Agent rationalisation
I wondered if there would be some rationalisation of the TSPs worldwide. Currently Suddath works with about 1900 businesses in the US. “Our position is that we need those small agents so, if you are in the programme today, if you deliver to the quality standards in line with the KPIs in the contract, and you have the capacity, then it's very likely that you will have opportunities to continue in the future. We need to rely on the infrastructure that's in place and we will partner with the supply chain to help raise the bar for everybody.”
But Mike said that there are some companies that are middlemen in the process and their position was less certain. “There are some approved TSPs who are who are just forwarders or move managers working as integrators to bring supply and demand together: their future is probably at risk.” But Mike said that those companies that bring the trucks, local labour and the capacity to perform the work are core to the programme.
Post COVID
I was intrigued about how Mike was planning on executing a contract that had been negotiated in a pre-COVID world when it was clear that any work undertaken would incur the additional costs of social distancing, PPE and resources. Had he worked out how the contract could accommodate those demands, especially as the requirements and practicalities would be different in every location? The goal posts had moved.
“It’s an interesting time to be awarded a contract like this during the biggest economic crisis that I hope I will see in my lifetime,” he said. “It is something that we will continue to monitor as we learn how to operate in a post-COVID world. There are already protocols that have been put in place and we will continue to work with our supply chain to evaluate what that means over time. In the future we will learn more about the virus and how best to deal with it. It will be a dynamic environment for a while.”
But it was the management of the additional costs that I was keen to understand. “I think that's an evolving area,” said Mike. “The first order of business is to make sure that there are proper safety protocols in place, then we’ll have a chance to digest what works and what doesn't work. I wish I had a crystal ball in this regard as I'm sure most people do, because it's a new territory.”
Mike said that the heart of the matter is the customer experience and the consortium’s ability to use Homefront to create a better service member experience. “The local moving and storage companies need to understand that we are investing in quality and capacity and there will be plenty of opportunities to continue to be part of the new programme going forward,” he said. “But working through a single consortium will take a little getting used to.”
The interview took place only a short time after the contract award had been made and, as explained earlier, the protest period was still in operation. Mike had obviously said as much as he was able under the circumstances and offered to talk again once any challenges had been processed.
Photo: Mike Brannigan