PowerTrack Faces Bumps Ahead

A Department of Defense plan to pay freight bills through a third-party electronic payment system is caught in a whirlpool of praise and criticism.

Though some bigger carriers are willing to embrace the new procedure, smaller companies criticize the change because of fear that the system will raise the cost of doing business and make it more difficult to handle DOD freight.

At issue is whether companies should be forced to pay a fee of up to 2% to participate in PowerTrack, an Internet-based electronic freight payment system developed by U.S. Bank of Minneapolis.

Under an agreement reached last month, PowerTrack will replace all paper-based and electronic fund transfer processes used by the U.S. Transportation Command, Defense Logistics Agency, National Guard, Army and Air Force (4-5, p. 4). DOD agencies contract with more than 600 truck, rail and ocean carriers, and are responsible for 12 million shipments worth $1 billion annually.

The new payment procedure should be fully running by September 2000, officials said.

DOD officials insist the system will streamline payment processes and save money for shippers and carriers. Some carriers agree, but others say the system unfairly shifts onto them costs that should be borne by the shipper.

Defense and Military Traffic Management Command officials have “welcomed” ATA’s involvement in representing the interests of carriers, Paul Stalknecht, senior vice president of the trucking federation.

A meeting of member carriers interested in the pilot program is scheduled for May 26 at ATA headquarters in Alexandria, Va. The organization will also consider forming an association to represent motor carriers that deal with government agencies, Stalknecht said.

For the full story, see the May 10 print edition of Transport Topics. Subscribe today.