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Some service members’ household goods shipments are being held by subcontractors in an effort to force contractors to pay for other work they’ve performed, according to the Surface Deployment and Distribution Command, the executive agency responsible for military moves for all services.
The command has “received notice of agents holding shipments hostage because of nonpayment for services performed,” SDDC officials said in a June 17 memo sent to military service officials, shipping offices, moving companies and DoD-approved storage facilities.
Information was not immediately available from SDDC about how widespread the problem is. The moving season is quickly approaching its busiest time of year, around July 4.
The military moving system awards shipments to companies that have been approved to do business, but those companies sometimes don’t have the packers, loaders, truckers and storage facilities to handle the work, so they hire subcontractor agents to do that work for them.
“Timely payment for agent and subcontractor services is a critical element of the [Transportation Service Provider contractor’s] responsibilities,” stated the SDDC memo.
The memo goes on to warn that federal law prohibits anyone involved in the transportation of property from placing a lien on, holding, impounding or otherwise interfering with the movement of baggage and household goods.
SDDC can convene a review board on all cases of shipments being held, and implement an immediate “non-use” action on agents who are holding back shipments, the memo noted.
Joel Summer, owner of Pacific Moving and Storage in Brooklyn, N.Y., said he doesn’t condone holding shipments hostage, but said such action “speaks volumes about the desperate situation that agents are in.”
He said he has received calls and copies of bills from several agents who are owed money from some contractors, with the bills all more than 90 days overdue.
“The agents are saying, ‘This is not a charity — pay me,’ ” he said.
“Agents have tried in every way possible to collect from certain unscrupulous [companies], but to no avail. The agents have been promised payment. No payment has been forthcoming. The agent knows if he has a shipment in [short-term storage] and delivers it, he will not collect a dime.”
Summer said he has volunteered to provide information to SDDC from moving companies who may be fearful of speaking out for fear of losing business.
Scott Michael of the American Moving and Storage Association said he also has heard from a few agents “about a couple of companies who aren’t paying their bills.”
“I’m told that SDDC has stepped in when they get multiple reports about the same company, and contacted them to encourage them to resolve the issues,” Michael said. “There may be legitimate business reasons why a particular bill is in dispute and payment is held up, but if there is a pattern, that’s probably an indication of something more serious.”