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S ec t i on I I : T ran s portat i on S p end Managemen t Cha l l enge s i n t he Gov ernmen t S ec tor
Transportation Management in the Federal Government
| Best Practices Report: 2012
Section II:
Transportation Spend Manage-
ment Challenges in the Government Sector
The differences between federal agencies cannot be stressed enough,
especially when looking to the private sector as a potential source for
improvements. Discrepancies exist both between and within agencies
on the importance of transportation, which impacts how they purchase
and track it, what systems they use, what they are willing to invest in
systems, and where innovation in this area lies for their overall strategy.
Some agencies have hundreds of staff dedicated to transport, while
others have as few as two or three members and this staff isn’t neces-
sarily dedicated solely to transportation matters. The size of the ship-
ping departments within agencies often coincides with its importance,
which is closely tied to budget allowances.
Transportation management-related staffing and budgets often play into
how agencies develop their contracts and set up service to monitor data
collection for transport. Agencies, especially those with less frequent or
highly specific shipments such as hazardous materials, wrap all their
transportation costs into all-in contracts. This limits their ability to
see how much is actually spent on freight transportation versus other
related charges. While federal agencies lean toward shorter contracts
of one- to two-year durations, not spelling out transport costs separately
makes it more difficult to collect information and figure out areas where
agencies can best reduce these costs.
The GSA requires all agencies to audit their transportation spending.
However, many of them do not know if they’re auditing properly
because they often lack the required data to look into an invoice and
parse out the true transportation costs. Failure to collect transportation-
spend data also makes it difficult to target opportunities for optimiza-
tion. While many federal agencies hire service providers to manage
the pre-audit process, these firms often lack the sophistication to do
a thorough and effective job which can leave money and opportunity
for improvement on the table.